Rigidity in small savings rates : Implications for monetary policy transmission
By: Jha,Arvind Kumar Das, Satadru and Kashyap, Yuvraj
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Material type: 
BookPublisher: Economic & Political Weekly Description: 60(51), Dec 20, 2025: p.20-24.
In:
Economic & Political WeeklySummary: A delay in revising small savings deposit rates widens the spread between them and banks’ term deposit rates of comparable maturities, potentially including a substitution from bank deposits to small savings. Empirical estimates indicate that a 100-basis-point increase in this spread raises the share of small savings in total fresh term deposits—that is, the sum of bank term deposits and small savings deposits—by about 1.2 percentage points. This substitution effect contributes to sluggish transmission to banks’ deposit rates, particularly during easing cycles, thereby impeding the monetary policy transmission.- Reproduced
https://www.epw.in/journal/2025/51/commentary/rigidity-small-savings-rates.html
| Item type | Current location | Call number | Vol info | Status | Date due | Barcode |
|---|---|---|---|---|---|---|
Articles
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Indian Institute of Public Administration | 60(51), Dec 20, 2025: p.20-24 | Available | AR138158 |
A delay in revising small savings deposit rates widens the spread between them and banks’ term deposit rates of comparable maturities, potentially including a substitution from bank deposits to small savings. Empirical estimates indicate that a 100-basis-point increase in this spread raises the share of small savings in total fresh term deposits—that is, the sum of bank term deposits and small savings deposits—by about 1.2 percentage points. This substitution effect contributes to sluggish transmission to banks’ deposit rates, particularly during easing cycles, thereby impeding the monetary policy transmission.- Reproduced
https://www.epw.in/journal/2025/51/commentary/rigidity-small-savings-rates.html
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