Rigidity in Small Savings Rates
Implications for Monetary Policy Transmission
Bibliographic Data
| ID | 9692405 |
|---|---|
| Authors | Yuvraj Kashyap Yuvraj Kashyap, Yuvraj Kashyap (corresponding author), Arvind Kumar Jha Arvind Kumar Jha, Arvind Kumar Jha (0000-0003-4464-6674), Satadru Das Satadru Das, Satadru Das |
| Year | 2026 |
| Volume | 60 |
| Issue | 51 |
| Publication date | 2026-01-02 |
| Open Access | No |
| Type | ARTICLE |
| Venue | Economic and political weekly/Economic & political weekly (JOURNAL) |
| Journal identifiers | ISSN: 0012-9976 • E-ISSN: 2349-8846 |
| Publisher | Sameeksha Trust (PUBLISHER) |
| DOI | 10.71279/epw.v60i51.47463 |
| OpenAlex | W7130947875 |
| Language | EN |
A delay in the revision of small savings deposit rates widens the spread between them and banks’ term deposit rates of similar maturities, which may lead to a substitution of bank deposits with small savings. Empirical analysis suggests that a 100 basis points increase in spread could increase the share of small savings deposits in total fresh term deposits, i.e., the sum of bank term deposits and small savings deposits by 1.2 percentage points. This substitution effect leads to sluggishness in transmission to banks’ deposit rates, especially in easing cycles, and impedes the monetary policy transmission
Basis point · Fixed deposit · Interest rate · Monetary policy · Quantitative easing · Rigidity (electromagnetism · Substitution (logic · Term (time · Banking stability, regulation, efficiency · Italy: Economic History and Contemporary Issues · Monetary Policy and Economic Impact
| Highly cited | No |
|---|