Mumbai: In a big update for consumers, the Reserve Bank of India (RBI) has updated its regulatory framework for deposit interest rates to boost transparency and standardize treatment for depositors across the banking sector. Set to take effect on October 1 following Friday’s notification, the new rules apply to commercial banks, small finance banks, regional rural banks (RRBs), local area banks, payments banks, and urban cooperative banks.
Under these revised guidelines, institutions must publish the interest rates for all deposit types—including bulk deposits, in advance on their official websites. Specifically for bulk deposits, banks are required to post applicable rates by 10:00 AM each business day, with a strict 10-minute grace period ensuring full public availability no later than 10:10 AM.
What are the new RBI norms on deposit interest rates?
The RBI has also mandated that deposit interest rates must be uniform across all branches of a bank and for all customers. Banks will not be allowed to discriminate between depositors by offering different interest rates on deposits of the same amount accepted on the same date at different branches. At the same time, the central bank has retained flexibility for lenders in pricing bulk deposits.
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Banks will be permitted to offer differential interest rates on bulk deposits after taking into account the rates applicable to deposits or unsecured wholesale funding under the Liquidity Coverage Ratio (LCR) framework, as outlined in the Reserve Bank of India (Commercial Banks – Asset Liability Management) Directions, 2025.
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The revised guidelines, however, do not prescribe any increase or reduction in fixed deposit (FD) interest rates from October 1. Deposit rates will continue to be determined by individual banks based on factors such as liquidity conditions, funding requirements and prevailing market dynamics.
While the changes are not expected to trigger immediate changes in retail fixed deposit rates, they are likely to improve transparency in the way banks disclose deposit rates and provide lenders with greater operational flexibility in managing bulk deposits.
(With inputs from agencies)