Reduction in retail deposits rates can have two consequences. First, it can result in increased disintermediation. Second, they can even affect the overall saving rate of the households in bank-dominated economies like India.
At a time, when the rate of gross saving to gross national disposable income has already fallen to 30% in 2013–14 from around 34 % in 2009–10, this could have adverse impact on growth and current account gap.