Borrowers and depositors have always been at loggerheads when it comes to interest rates in the economy. While a steep cut can bring relief to a borrower, a similar move by banks on deposit rates can be unpleasant to many who still swear by bank deposits to park their savings. In the last year or so, as the Reserve Bank of India lowered its key policy rate, many banks have been quick to slash deposit rates by 1.5-2 percentage points. This has not gone down well with depositors, who argue that there has been no comparable relief on loan rates.
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