Small Finance Banks are increasingly leaning on secured products like gold loans to steady earnings and financial health, as unsecured microfinance continues to struggle with elevated bad-loan ratios. The shift aligns with regulator pressure to diversify away from concentrated risk. Larger banks are also expanding microfinance, but the overall pivot toward collateral-backed lending signals a strategy for long-term stability.
Senior citizens can still find fixed deposit (FD) interest rates up to 8.05% for a three-year tenure at select small finance banks, though the benefit is capped at Rs 3 crore. Banks typically deduct TDS on FD interest above Rs 1 lakh annually, but seniors with zero tax liability can submit Form 15H to avoid it.
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