...The prime motive behind the deregulation is to maintain the positive real interest rates in the economy. Deregulation will make the rate of interest on savings account flexible, market driven and in sync with the interest rate on other time deposits with banks with shorter maturities of upto 1 year. Furthermore, the large population living in rural and semi urban areas will benefit from this move. Unlike in metropolitan areas, where the savings bank account is held more for the day to day transaction purpose, in rural areas savings accounts is held primarily for saving and some even consider it as their investments. Hence deregulation is expected to make savings account more attractive in these areas and could have a positive impact on savings........
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