Centre withdraws interest rate cut on savings deposits, PPF; calls it oversight

The Centre had announced on Wednesday to cut interest rates on small savings schemes like the PPF and NSC.

Finance Minister Nirmala Sitharaman on Thursday announced the Centre's decision to roll back steep cuts on interest rates on small savings schemes like the Public Provident Fund (PPF) and the National Savings Certificate (NSC) by declaring the previous decision as "orders issued by oversight.'

"Interest rates of small savings schemes of the Government of India shall continue to be at the rates which existed in the last quarter of 2020-2021, ie, rates that prevailed as of March 2021. Orders issued by oversight shall be withdrawn," Ms Sitharaman tweeted today. On Wednesday, last day of the financial year, the government had announced a cut of up to 1.1 percent in interest rates for the first quarter of 2021-2022.

If the interest rates would not have been withdrawn, the PPF and NSC would have reduced to 6.4% and 5.9% respectively. For the coming three months, PPF and NSC will continue to offer interest of 7.1% and 6.8%, as per the roll back. Savings deposits will offer 4% interest instead of the reduced 3.5%.