Federal Bank launches savings account sans interest rate

MUMBAI: Aluva-based Federal Bank has launched a non-interest bearing savings account targeting those whose beliefs do not permit them to accept interest payments. The 'Noor Personal Account' was launched on Milad-e-sherif.

While account holders will not earn any interest they will get a platinum debit card which will provide them lounge access in airports eight times a year. Federal Bank said that the holders of this account will be eligible for a "Platinum RuPay" card with daily transaction limit of Rs 2 lakh.

In 2015, an RBI panel had recommended that banks open a separate window offering interest-free deposits and advances to address financial exclusion based on faith. The recommendation came at a time when the central bank had ruled out Islamic banking on the grounds that interest payment was ingrained in present regulations.

Bankers say that there are several customers who do not wish to receive interest. Last month, responding to a `Right to information' query last month, the RBI said that it has decided not to implement Islamic banking in India. ""Taking into account, the wider and equal opportunities available to all citizens to access banking and financial services, it has been decided not to pursue the proposal further," the central bank said.