It is reliably learnt that the apex bank has allowed the cooperative banks to work out their own norms for conversion of fixed deposits. The move is aimed at enabling the banks to improve their asset liability management.
Presently a customer is at liberty to withdraw his fixed deposit anytime he so desires and he does not have to suffer any loss because of his decision. The absence of punishment is being seen as an encouragement of mobilizing of deposits by customers.
Experts say the RBI decision has not come a moment too soon and the cooperative banks will have the freedom needed to be able to perform much better on the asset liability management front now.
