Senior citizens age re-designates as 60+ for banking purposes

Senior citizens age re-designates as 60+ for banking purposes

19 May 2019 06:34 pm

People who retire at age of 55 will now have to wait till they reach 60 years to be recognised as senior citizens to get banking and finance company benefits, according to a recent Central Bank (CB) directive.

Licensed banks and finance companies (Non Bank Financial Institutions- NBFI) have been directed that senior citizens should be considered as those who are 60 years and above, after most of these institutions used 55 years as the threshold age.

The CB has issued this directive in a circular sent to banks and NBFIs on maximum interest rates on deposits and debt instruments.

In that circular, it has been clearly clarified that the senior citizens’ threshold age is 60 years and not 55 years, a senior CB official said adding that certain banks and NBFIs used to consider people aged 55 years or above as senior citizens.

“The Monetary Board having observed that licensed banks and licensed finance companies use different thresholds of age to identify senior citizens when conducting banking operations has decided to request it to use the common threshold of 60 years of age in identifying senior citizens,” the official said.

Accordingly all benefits granted to persons of 55 years and over considering them as senior citizens will be henceforth given to only senior citizens of 60 years of age and over.

The 15 per cent special interest paid on fixed deposits will now be paid for the upper limit up to 1.5 million rupees and eligible to those of 60 years or over.

The Government pays the difference between the 15 per cent and the market standard interest rate offered by commercial banks and NBFIs, a Finance Ministry official said adding that the Treasury pays Rs. 13,000 million rupees per annum for this purpose.

A special interest rate which is higher than the normal interest rate for fixed deposits and savings accounts will be offered by commercial banks for senior citizens in age group of 60 or 60 plus and they are also eligible for Debit Card free of charge.

A 20 per cent bonus interest on interest paid on rupee deposits is now being paid to senior citizens aged 60 years or over.