I read articles on SB interest deregulation in response to RBI's Discussion Paper on Deregulation of Savings Bank Deposit Rate and my own workings on the subject topic.Such deregulation may impact banks NIM and liquidity management. What I noticed is that there is no (near)records on the following, and in absence of which any study would be partially imaginary.
Transaction cost on SB, Grouping of average balances in various ticket sizes,SB core portion in various time buckets, cheque usage data,all these parameters again grouped in rural, urban and metro.
SBs have also come with Flexi-deposit options and the de-regulation effect on such Flexi-deposit options, cost of operation for Flexi deposits, need also to be studied as de-regulation of SB deposits with interest rates higher or near to short term deposits would discourage SB holders to opt for Flexi-deposits, since Flexi-dep has pre-mature closure penalty.
In these internet banking driven days, flight of SB funds between intermediaries would be almost instantaneous and liquidity management skills demand more competencies among banks.
Collection and validation of such data for at-least 3-4 years for Indian-PSU banks and crunching such voluminous data take minimum 6 months. Till such time any impact study on whether the SB rates are to be deregulated is only hypothetical.
Regulators need to work on gathering the highly dynamic SB/Flexi data for meaningful inferences and ideas on transmission of monetary polices through SB route.
TVRAAO
Transaction cost on SB, Grouping of average balances in various ticket sizes,SB core portion in various time buckets, cheque usage data,all these parameters again grouped in rural, urban and metro.
SBs have also come with Flexi-deposit options and the de-regulation effect on such Flexi-deposit options, cost of operation for Flexi deposits, need also to be studied as de-regulation of SB deposits with interest rates higher or near to short term deposits would discourage SB holders to opt for Flexi-deposits, since Flexi-dep has pre-mature closure penalty.
In these internet banking driven days, flight of SB funds between intermediaries would be almost instantaneous and liquidity management skills demand more competencies among banks.
Collection and validation of such data for at-least 3-4 years for Indian-PSU banks and crunching such voluminous data take minimum 6 months. Till such time any impact study on whether the SB rates are to be deregulated is only hypothetical.
Regulators need to work on gathering the highly dynamic SB/Flexi data for meaningful inferences and ideas on transmission of monetary polices through SB route.
TVRAAO
