RRBs to Pay Savings Interest on Daily Balance from April 2010
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2009-10/169 · issued 24 Sep 2009 · ~1 min read
Quick answerRBI directs Regional Rural Banks to calculate savings account interest on daily product basis from April 1, 2010, replacing the old minimum balance method. Banks must prepare for smooth transition.
What changed
Previously, interest on savings deposits was calculated on the minimum balance between the 10th and last day of each month. RBI has now mandated that interest be calculated on the daily product basis, effective April 1, 2010.
What it means for you
This change benefits depositors by crediting interest for every day's balance, increasing returns on savings accounts. For RRBs, it requires system upgrades and process changes to compute interest daily, potentially impacting net interest margins slightly.
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
Update core banking systems to compute interest on daily product basis by April 1, 2010.
Train staff on the revised calculation method and communicate changes to customers.
Review and adjust interest rate pricing and fee structures to manage margin impact.
Ensure compliance with the directive and submit transition plan to RBI if required.
Who it affects
Regional Rural Banks, Savings account customers of RRBs, RBI's Rural Planning and Credit Department
❓ Common questions
Regulatory timeline
Stated effective dateeffective April 1, 2010
Decoded by BankPulse2026-06-19 08:39 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the daily product basis for savings interest?
Interest is calculated on the actual daily balance in the account, summed over the month, instead of the earlier method based on minimum balance between 10th and last day.
When does this change take effect?
The revised procedure is effective from April 1, 2010, as per the RBI circular dated September 24, 2009.
Does this apply to all savings accounts in RRBs?
Yes, the directive applies to all savings bank accounts maintained by Regional Rural Banks.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1811: RPCD.CO.RRB.BC.No.25/03.05.33/2009-10 — "Payment of Interest on Savings Bank Account on a Daily Product Basis" dated September 24, 2009”
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/169
RPCD.CO.RRB.BC.No. 25 /03.05.33/2009-10
September 24, 2009
The Chairman
All Regional Rural Banks
Dear Sir,
Payment of Interest on Savings Bank Account on a Daily Product Basis
Please refer to para 2(iii) of the directive DBOD.No.Dir.BC.151/C.347-85 dated December 27,1985, in terms of which interest in the case of savings deposits, shall be calculated on the minimum balance to the credit of the deposit account during the period from the 10th to the last day of each calendar month.
2. On a review, it has been decided that the interest on balances in savings bank accounts would be calculated on a daily product basis with effect from April 1, 2010. Regional Rural Banks are advised to work out modalities to effect a smooth transition to the revised procedure.
Yours faithfully
(R.C.Sarangi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/169 · issued 24 Sep 2009. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 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=5288&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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