Home › Circulars › RBI/2009-10/119

Frozen deposit renewal: depositor can now choose term

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/119 · issued 12 Aug 2009 · ~1 min read
Quick answerRBI now allows depositors of frozen term deposits to choose the renewal term instead of being forced to renew for the original term. Banks must obtain a request letter with the depositor's preferred term; if no option is given, renew for the original term.

What changed

Earlier, banks were required to renew frozen term deposits for a term equal to the original term on maturity. Now, the depositor can choose the renewal term, and banks must offer this option. If the depositor does not specify a term, the original term applies.

What it means for you

Banks must update their frozen account renewal procedures to include a clear option for depositors to select the renewal term. This gives depositors more flexibility and reduces potential disputes. Lenders need to ensure their request letters and systems accommodate this choice.

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

Who it affects

All scheduled commercial banks (excluding RRBs), Depositors with frozen term deposit accounts, Bank operations and customer service teams

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What happens if the depositor does not choose a renewal term?

If the depositor does not exercise the option, banks must renew the deposit for a term equal to the original term, as per the earlier practice.

Does this apply to all frozen accounts?

Yes, this applies to term deposit accounts frozen by enforcement authorities, as covered in the Master Circular on Customer Service.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1840: DBOD.No.Leg.BC.30/09.07.005/2009-10 — "Payment of Interest on Accounts Frozen by Banks" dated August 12, 2009”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/119 DBOD.No.Leg.BC.30 /09.07.005/2009-10 August 12, 2009 All Scheduled Commercial Banks (Excluding RRBs) Dear Sir, Payment of interest on accounts frozen by banks Please refer to paragraph 5.8.9 of our Master Circular DBOD.No.Leg.BC.9/ 09.07.006/ 2009-10 dated July 1, 2009 on Customer Service, wherein banks have been advised to follow the procedure laid down thereunder in respect of Term Deposit Accounts frozen by the enforcement authorities. 2. In terms of paragraph 5.8.9 (i), banks were advised to obtain a request letter from the customer for renewal for a term equal to the original term , on maturity. On a review, it is felt that instead of renewing it for a term equal to the original term, it would be appropriate if the depositor is given the option to choose the term for renewal of the deposit. 3. Banks may, therefore, while obtaining the request letter from the depositor for renewal, also advise him to indicate the term for which the deposit is to be renewed. In case the depositor does not exercise his option of choosing the term for renewal, banks may renew the same for a term equal to the original term. Yours faithfully (B.Mahapatra) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/119 · issued 12 Aug 2009. The plain-English explanation above is BankPulse’s own independent summary.
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Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=5212&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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