The Reserve Bank of India (RBI) plans to amend the rules for Fixed Deposits (FDs), introducing new provisions that will affect interest rates on FDs, as well as include several other additions. The updated term deposit rules will become effective from October 1, 2020.
The objective of these revised guidelines is to provide banks with greater flexibility in determining interest rates and to introduce new rules for bulk deposits. A bulk deposit is defined as an FD amounting to INR 30 million or more.
Banks are now required to update interest rate information daily by 10 AM. Starting from October 1, 2026, banks must publish deposit interest rates, including those for bulk deposits, on their websites.
Interest rates for bulk deposits must be updated on the bank's website every working day at 10:00 AM, with an additional buffer of 10 minutes, and this announcement must be made no later than 10:10 AM.
Banks have been instructed to provide a uniform interest rate for the deposit amount received on the same day. The RBI emphasized that there should be no discrimination regarding the interest accrued on identical deposit amounts received on the same day across any branch.
Regarding bulk deposits, banks will be given the freedom to set differentiated interest rates, taking into account differential outflow rates applicable to deposits or unsecured bulk deposits within the LCR framework.
Since these rules pertain to large deposit amounts (INR 30 million and above), the impact on small depositors is likely to be limited. Nevertheless, these directives will enhance transparency and uniformity in the banking sector.