INTEREST RATE

Rotorua Morning Post, Volume 1, Issue 200, 16 April 1932, Page 4

INTEREST RATE

(Press. Assn.-

BANKS PROPOSE REDUCTION OF HALF PER CENT AVERAGE

-By Telegra.t> h — Copyright).

WELLINGTON, Fridky It was stated hy the chairman of I the Associated Banks to-day that the banks proposed to make a reduction in the rate of interest on advances so as to bring the rate down on. the I average by one half per cent. with a j minimum rate of six per cent. k | The proposed reduction will involve 1 a reduction in the deposit rate also, 1 but untif the Government has decided I upon a reduction in the deposit rate 1 for Government Departments and oth- I ers, the alteration in the bank de- I posit rate cannot be made. 1 A reduction of the bank overdraft I rate will take effect three months 1 after the alteratiori in the deposit 1 rate. The banks will continue to pay 1 the higher rate drawn by the current I deposit for a period up to 24 months. I Attention is also drawn to the fact I that with the minimum advance for I the overdraft rate at 6 per cent. per ■ annum and five per cent. per annum I being payable on current and 24 B months' deposit until July, 1933. there B is a margin of only one per cent. ■ in respect of the latter. This, however, Bc is reduced by the incidence of the ■ banks income tax of rather niore than 8 8/9 per cent. per annum of deposits m and another 8/9 per cent. on advances® to he lowered hy 2/6 per cent. per® annum. ®