Order to cut interest rates on small savings reversed: FM

New Delhi : Finance Minister Nirmala Sitharama on Thursday announced that an order to reduce interest rates on small savings will be withdrawn and the interests will remain same as it was announced in last quarter of 2020-2021.

"Interest rates of small savings schemes of the Government of India shall continue to be at the rates which existed in the last quarter of 2020-2021, i.e, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn," said FM Nirmala Sitharaman.

Earlier on Wednesday, an interest rate cut was announced. Savings deposit was revised from 4% to 3.5%, annually. PPF rate was slashed from 7.1% to 6.4%, annually. 1 year time deposit was revised from 5.5% to 4.4%, quarterly. Senior citizen savings schemes rate have been slashed from 7.4% to 6.5%, quarterly.

The finance ministry, while announcing the quarterly setting of interest rates in 2016, had said that rates of small savings schemes would be linked to government bond yields.

The Reserve Bank of India (RBI) had last month kept interest rates static for the fourth time in a row at 4 percent on concerns of inflation.