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Informist, Thursday, Jul. 30, 2026

--RBI issues amended directions on banks' interest rate on deposits 

--RBI: Amended directions on banks' deposit rates effective Oct 1 

NEW DELHI – The Reserve Bank of India Thursday allowed banks to offer differential interest rate on bulk deposits, by considering the differential run-off rate applicable on deposits or unsecured wholesale funding under the liquidity coverage rate framework. The central bank permitted this under the amended directions for banks' interest rate on deposits, which will be effective from Oct. 1. 

Further, the RBI directed banks that interest rates offered on deposits, including bulk deposits, should be uniform across all branches and for all customers. Moreover, there should be no discrimination in the matter of interest paid on the deposits, between one deposit and another deposit of similar amount, accepted on the same date, at any of bank offices, it added.

Interest rates payable on deposits, including bulk deposits, should be strictly as per the schedule of interest rates disclosed in advance on the bank's website, the RBI said. However, interest rates payable on bulk deposits needs to be disclosed on the bank's website at 1000 IST, with a grace time of 10 minutes, latest by 1010 IST, on each business day. 

While issuing draft directions in June, the RBI had said that through these norms it was looking to provide greater flexibility to banks for pricing their rupee bulk deposits, while ensuring uniformity in disclosure of interest rates on deposits. Following the draft directions, the RBI recieved feedback asking for freedom that use of run-off rates for pricing be extended to deposits of less than INR 30 million, to ensure that customers with higher run-off rates are not able to split bulk deposits into multiple deposits of less than INR 30 million to avail the higher interest rates.

However, the RBI rejected the feedback saying, "...permitting banks to offer differential interest rates on deposits of less than 3 crore (INR 30 million), based on differential run-off rates, would make the interest rates offered on such deposits more subjective and complex." End

Reported by Pratiksha

Edited by Akul Nishant Akhoury

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