Abrupt reduction of Fixed Deposit interest leaves senior citizens in a quandary
Under the strict instructions of the Governor of the Central Bank all state and Commercial banks have delivered a intense executioner strike abruptly to all the senior citizens under the DDR/DDO by drastically reducing the interest rates on Fixed Deposits which have been slashed alarmingly to between 10 -12% from the month of June 2023. The interest rates were enhanced to 23 -27% rate by the banks in the middle part of 2022,was mainly to attract more deposits to bank coffers. With this increase many senior citizens who were fortunate to hold fixed deposits were able to some extent to make ends meet without pleading for donations or borrowings. Even then they had not lived in a luxury life which senior citizens of developed countries are privileged to live in. It is learnt that the children of certain less fortunate senior citizens had with the greatest difficulty accumulated funds had deposited in the names of ageing parents to offer redress by allowing them earn interest to lead somewhat of a comfortable life with reasonable foods and funds to purchase the essential medicines.The writer is ex executive in a state bank fortunately migrated to down under a decade ago wish to state that the intention the Central Bank authorities in lowering the rates of deposits is to lend at lower interest rates but there will not be an equivalent amount of borrowers owing to the fact that many figure in CRIB as borrowers and guarantors.This decision will only inflate the bank profits which will be ideal for Bank Managers to accumulate marks for their next promotions. Hence this decision of the Central Bank will not reap expected results.
The new deposit rates have initiated a great deal of gloom already mainly to senior citizens. The daily skyrocketing cost of living with exorbitant prices of drugs all senior citizens and even the layman face huge financial constraints to live a plain life sans any extravagant expenses or even a semi luxury life . In addition the National Water Supply & Drainage Board though informed had increased the tariffs by fifty per cent it is learnt that when the bills were received the increased tariff had been over one hundred percent. The increase in tariffs of electricity and telecommunication bills too are in excess of new tariffs what was notified.This had made the all citizens including senior citizens to ponder as to how to make ends meet.
It appears that all administrative bodies under the government show no redress with regard allow a to decent living of middle and lower middle class citizens. Though the intention the Governor Central Bank is to lend at lower interest rates, the proposal will not prove futile as there will not be many borrowers in relation to the amount of deposits of senior citizens. It also be mentioned regrettably the scheme for senior citizens where 15% interest for Fixed Deposits commenced a few years ago had been scrapped that too to burden the poor senior citizens. All who are now affected are those whom had toiled had in serving the nation in public ,bank and other commercial private enterprises until they were forced to retire.This sudden reduction of deposit rates has made them to ponder how they are going to make ends meet.
In the above foregoing hope the Governor Central Bank sould realize that the decision to lower Fixed Deposit rates is not prudent should think seriously to revoke the decision and to increase the interest rates forthwith for the benefit of all depositors and banks.
Sunil Thenabadu via e mail in Brisbane
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