The government on Saturday announced steep cuts in interest rates of small savings schemes such as PPF, Kisan Vikas Patra.

"If savings rate is 9 percent and inflation is 11 percent, then those who are saving are getting nothing. And if inflation is 5 percent and savings rate is 9 percent, then saving is increasing. Taking savings rate in itself will be confusing. It should be seen in relation with inflation, to ensure that they are rewarding," Bhattacharya said, speaking to reporters at 51st convocation ceremony of IIM Ahmedabad.

She was replying to the question if quarterly changes in interest rates on small savings schemes would have an impact on demand in the housing sector. Bhattacharya, however, refused to take question on Vijay Mallya. SBI is the biggest lender of Mallya-founded Kingfisher Airlines.

In her speech, Bhattacharya thanked the institute for inviting her as the chief guest at a time when the "public sector bankers are not really flavour for the day."

The top banker exhorted the students to work for the financial inclusion. "On one hand we have this class of people who will be globally at ease, on the other we also have very desperately poor people. How will you bridge the gap? If the majority remain down and there is a minority that is going up, the fabric of the society will bend," she said.

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