Abrupt reduction of FD interest leaves senior citizens in a quandary

Under the strict instructions of the Governor of the Central Bank all State and commercial banks have delivered an intense executioner strike abruptly to all the senior citizens under the DDR/DDO by drastically reducing the interest rates on  fixed deposits which have been slashed alarmingly to between 10 -12% from the month of June 2023. The interest rates were enhanced to 23 -27% by the banks in the middle part of 2022, probably mainly to attract more deposits to bank coffers. With this increase many senior citizens who were fortunate to hold fixed deposits were able to some extent to make ends meet without pleading for donations or borrowings. Even then they had not lived in a luxury life which all senior citizens of developed countries are privileged to live in. It is learnt that the children of certain less fortunate senior citizens had with the greatest difficulty accumulated funds to deposit in the names of ageing parents to offer redress by allowing them to earn interest to lead somewhat of a comfortable life with reasonable foods and funds to purchase the essential medicines.

The writer, an ex-executive in a State bank who fortunately migrated to down under a decade ago wishes to state that the intention the Central Bank authorities in lowering the rates of deposits is to lend at lower interest rates but there will not be an equivalent amount of borrowers owing to the fact that many figure in CRIB as borrowers and guarantors. This decision will only inflate the bank profits. Hence this decision of the Central Bank not to reap expected results would prove futile. The new deposit rates have initiated a great deal of gloom already mainly to senior citizens. The daily skyrocketing cost of living with exorbitant prices of drugs all senior citizens and even the layman face huge financial restraints to live a plain life sans any extravagant expenses or even a semi luxury life. In addition the National Water Supply and Drainage Board, though informed, had increased the tariffs by 50%, it is learnt that when the bills were received the increased tariff had been over one hundred percent. The increase in tariffs of electricity and telecommunication bills too are more than new tariffs that were notified. This had made all citizens including senior citizens to ponder as to how to make ends meet have fallen from frying pan to furnace.

It appears that all administrative bodies under the Government show no redress to a decent living of middle and lower middle class citizens have increased to tall elevations. Very recently once more the prices of fuel and gas were increased – with it, increase in transport charges is eminent. Though the intention of the Governor of the Central Bank is to lend at lower interest rates, the proposal will not prove futile as there will not be many borrowers in relation to the amount of deposits of senior citizens. It also regrettably mentioned the scheme for senior citizens where 15% interest for fixed deposits commenced a few years ago had been scrapped as it had burdened the poor senior citizens then too. They were slapped with a 1.5 million ceiling.

 All those who are now affected are those who had toiled hard during the tenure of their services in serving the nation in public, bank and other commercial private enterprises until they were forced to retire. This sudden reduction of deposit rates has made them ponder as to how they are going to make ends meet.

In the above foregoing hope, the Governor of the Central Bank should realise that the decision to lower fixed deposit rates is not prudent, hence should think seriously to revoke the decision and to increase the interest rates forthwith for the benefit of all depositors with a view to allow a decent living – particularly to senior citizens in their twilight years. To offer redress to the above facts the President’s intervention is sought.

Sunil Thenabadu in Brisbane