What changed
This is an annual consolidation of existing instructions on interest rates for rupee deposits, incorporating updates issued between July 1, 2008, and June 30, 2009. It replaces the previous master circular dated July 1, 2008, and includes all relevant circulars listed in Annex 4.
What it means for you
Banks must ensure their deposit interest rate policies comply with the consolidated directives, covering minimum tenor, savings and term deposit rates, premature withdrawal rules, and special categories like senior citizens and staff. The circular also reiterates prohibitions on certain deposit schemes and requires banks to notify RBI of any interest rate changes.
What you must do
- Review and update your bank's deposit interest rate policy to align with the consolidated master circular.
- Ensure compliance with minimum tenor and interest rate guidelines for domestic, NRO, and NRE deposits.
- Notify RBI of any changes in deposit interest rates and provide break-up of deposits by interest rate ranges.
- Adhere to rules on premature withdrawal, renewal of overdue deposits, and interest on deceased depositor accounts.
Who it affects
All scheduled commercial banks (excluding RRBs), Treasury and deposit operations teams, Compliance and risk management departments, Retail and NRI banking divisions
Does this circular introduce any new interest rate regulations?
No, it is a consolidation of existing instructions issued up to June 30, 2009, updating the previous master circular. No new regulations are introduced.
Are Regional Rural Banks covered under this circular?
No, the circular explicitly excludes Regional Rural Banks from its application.
What should banks do if they want to change deposit interest rates?
Banks must notify RBI regarding any change in interest on deposits and also provide the break-up of deposits according to different interest rate ranges, as per para 2.18.