Current · Source: Reserve Bank of India · RBI/2009-10/47 · issued 01 Jul 2009 · ~2 min read
Quick answerRBI consolidated all existing guidelines on Certificates of Deposit (CDs) into a single Master Circular effective July 1, 2009. Key rules: minimum deposit Rs.1 lakh, maturity 7 days to 1 year for banks, and NRIs can subscribe only on non-repatriable basis.
The rule, in the simplest words
A Certificate of Deposit (CD) is like a special bank receipt you buy for at least 1 lakh rupees (100,000 rupees).
Banks can sell CDs that last from 7 days to 1 year; other financial institutions can sell them for 1 year to 3 years.
People from other countries (NRIs) can buy CDs only if they promise not to send the money back abroad (non-repatriable basis).
If a CD has a changing interest rate (floating rate), the bank must use a clear, fair rule (like a market benchmark) to decide the rate and change it at set times.
How it plays out — a real example
A branch operations officer in Indore, Priya, is helping a customer who wants to invest 2 lakh rupees for 3 months. She explains that the bank offers a Certificate of Deposit (CD) for exactly that amount and period, and that the interest rate is fixed. She also checks that the customer is an Indian resident, because if they were an NRI, the CD would have to be marked 'non-repatriable' so the money stays in India.
What changed
RBI issued a Master Circular consolidating all prior directives on CDs into one document, effective July 1, 2009. No new policy changes were introduced; the circular merely compiled existing instructions for easier reference.
What it means for you
Banks and financial institutions now have a single reference point for CD issuance rules, reducing compliance ambiguity. The circular reaffirms existing requirements like minimum deposit size, maturity periods, and reserve requirements, ensuring consistency across the market.
What you must do
Review and update internal CD issuance policies to align with the consolidated Master Circular.
Ensure CD documentation clearly states NRI subscriptions are on non-repatriable basis only.
Verify that floating rate CDs use objective, transparent, and market-based benchmarks with periodic resets.
Maintain CRR and SLR on the issue price of CDs as per existing requirements.
Who it affects
Scheduled commercial banks (excluding RRBs and LABs), All-India financial institutions permitted to issue CDs, Treasury and compliance departments of banks and FIs, Investors subscribing to CDs, including NRIs
❓ Common questions
Regulatory timeline
Stated effective dateeffective July 1, 2009
Decoded by BankPulse2026-06-19 09:43 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the minimum deposit amount for a Certificate of Deposit?
The minimum amount for a CD is Rs. 1 lakh per subscriber, and subsequent multiples must be in Rs. 1 lakh increments.
Can NRIs invest in CDs, and are there any restrictions?
Yes, NRIs can subscribe to CDs, but only on a non-repatriable basis. This condition must be clearly stated on the certificate, and such CDs cannot be endorsed to another NRI in the secondary market.
What are the maturity periods for CDs issued by banks versus financial institutions?
Banks can issue CDs with maturities from 7 days to 1 year. Financial institutions can issue CDs for a period of not less than 1 year and not exceeding 3 years from the date of issue.
📜 Read the original circular — full text as issued by RBI
RBI/2009-10/47
FMD.MSRG.No. 38/02.08.003/2009-10
July 1, 2009
The Chairmen / Chief Executives of
All Scheduled Banks (excluding RRBs and LABs)
and All-India Term Lending and Refinancing Institutions
Dear Sirs,
Guidelines for Issue of Certificates of Deposit
As you are aware, with a view to further widening the range of money market instruments and giving investors greater flexibility in deployment of their short-term surplus funds, Certificates of Deposit (CDs) were introduced in India in 1989. Guidelines for issue of CDs are presently governed by various directives issued by the Reserve Bank of India, as amended from time to time.
A Master Circular incorporating all the existing guidelines / instructions / directives on the subject has been prepared. It may be noted that this Master Circular consolidates and updates all the instructions / guidelines contained in the circulars listed in the Appendix, in so far as they relate to 'guidelines for issue of CDs'. This master circular has been placed on RBI website at www.mastercircular.rbi.org.in
Yours faithfully,
(Chandan Sinha)
Chief General Manager
Master Circular on Guidelines for Issue of Certificates of Deposit (CDs)
(as Amended up to June 30, 2009)
Introduction
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2009-10/47 · issued 01 Jul 2009. The plain-English explanation above is BankPulse’s own independent summary.
Example: if you are a Compliance officer at a bank this circular applies to (Scheduled commercial banks (excluding RRBs and LABs), All-India financial institutions permitted to issue CDs, Treasury and compliance departments of banks and FIs, Investors subscribing to CDs, including NRIs), your first concrete step on “Master Circular on Certificates of Deposit (2009)” is: “Review and update internal CD issuance policies to align with the consolidated Master Circular.” (RBI issued this 01 Jul 2009).
Circular: RBI/2009-10/47 -- Master Circular on Certificates of Deposit (2009)
Issued: 01 Jul 2009
Action required: Review and update internal CD issuance policies to align with the consolidated Master Circular.
Action required: Ensure CD documentation clearly states NRI subscriptions are on non-repatriable basis only.
Action required: Verify that floating rate CDs use objective, transparent, and market-based benchmarks with periodic resets.
Action required: Maintain CRR and SLR on the issue price of CDs as per existing requirements.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
💬 Banker Discussion
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=5102&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.