Banks told to drop special deposit schemes

Depositors who are wary of withdrawing their money from fixed deposits for fear of losing the interest may soon have some relief. The Reserve Bank of India has asked banks that are offering special term deposit schemes under which no interest is paid in case of premature withdrawal during the lock-in period, to discontinue such schemes with immediate effect. The interest rates offered on these deposits are not in tune with the rates of interest on normal deposits, said the RBI.