RBI keeps interest rate on delayed govt remittances at 8%
No longer current — replaced by RBI/2019-20/81 DCBR.BPD.(PCB/RCB).Cir.No.04
Source: Reserve Bank of India · RBI/2005-06/387 · issued 17 May 2006 · ~1 min read
Quick answerRBI has maintained the 8% interest rate on delayed remittances and excess/double reimbursement for government accounts, unchanged from the November 2005 circular. This rate is calculated as Bank Rate minus 6% plus 2%.
What changed
RBI issued a circular on May 17, 2006, confirming that the interest rate on delayed remittances and excess/double reimbursement for government accounts remains at 8%. This rate is unchanged from the previous circular dated November 18, 2005.
What it means for you
Banks handling government accounts must continue to pay 8% interest on any delayed remittances to the government or on amounts received as excess/double reimbursement. This rate is fixed until further notice, so no immediate adjustment is needed in your systems or provisioning.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Ensure your systems apply the 8% interest rate on delayed government remittances and excess/double reimbursement.
Update internal guidelines to reflect that this rate remains unchanged from the November 2005 circular.
Monitor any future RBI circulars for potential changes to this rate.
Who it affects
State Bank of India and its associates, All nationalized banks, Jammu & Kashmir Bank Ltd., IDBI Ltd., HDFC Bank Ltd., ICICI Bank Ltd., UTI Bank Ltd.
❓ Common questions
Regulatory timeline
Decoded by BankPulse2026-06-19 18:32 IST
Superseded by — RBI/2019-20/81 DCBR.BPD.(PCB/RCB).Cir.No.04
Status change: superseded09 Jul 2026, 04:07 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the interest rate on delayed remittances for government accounts?
The rate is 8% per annum, calculated as Bank Rate minus 6% plus 2%, as per the May 17, 2006 circular.
Does this circular change the previous rate?
No, it confirms that the rate remains unchanged from the November 18, 2005 circular.
Which banks are covered by this circular?
State Bank of India and its associates, all nationalized banks, Jammu & Kashmir Bank Ltd., IDBI Ltd., HDFC Bank Ltd., ICICI Bank Ltd., and UTI Bank Ltd.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
📜 Read the original circular — full text as issued by RBI
RBI/2005-06/387
DGBA.GAD.No.H.17981/42.01.011/2005-06
May 17, 2006
Vaishakha 27, 1928 (S)
The Chairman/Managing Director,
State Bank of India & its Associates,
All Nationalized Banks,
Jammu & Kashmir Bank Ltd.,
IDBI Ltd./HDFC Bank Ltd./
ICICI Bank Ltd./UTI Bank Ltd.
Dear Sir,
Maintenance of Government Accounts – Interest on Delayed Remittances and Excess/Double Reimbursement
Please refer to our Circular No. RBI/2005/209(DGBA.GAD.No.H.5872/42.01. 011/2005-06) dated November 18, 2005 on the above subject.
2. We advise that the rate of interest on delayed remittances and double/ excess reimbursement remains unchanged at 8% (i.e. Bank Rate - 6% + 2%) till further instructions.
Yours sincerely,
(M. T. Varghese)
General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2005-06/387 · issued 17 May 2006. The plain-English explanation above is BankPulse’s own independent summary.
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BankPulse Compliance Evidence Pack — generated 05 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=2869&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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