What changed
The savings deposit interest rate for Regional Rural Banks was increased by 0.5 percentage points, from 3.5% to 4.0% per annum. This change applies to domestic savings deposits, ordinary Non-Resident savings deposits, and savings deposits under the Non-Resident (External) Accounts Scheme. The revision took effect immediately from May 3, 2011.
What it means for you
RRBs must now offer a minimum of 4.0% on savings deposits, increasing their cost of funds slightly. This aligns RRB savings rates with the broader scheduled commercial banking system. Banks should update their system interest rate tables and communicate the change to depositors and branches promptly.
What you must do
- Update savings deposit interest rate to 4.0% per annum for domestic, NRO, and NRE accounts effective May 3, 2011.
- Amend relevant product documentation, system parameters, and interest calculation modules.
- Notify all branches and ensure compliance with the revised directive.
- Acknowledge receipt of this circular to the respective RBI Regional Office.
Who it affects
Regional Rural Banks, Savings account holders (domestic, NRO, NRE), RRB treasury and operations teams
Does this rate change apply to all savings accounts at RRBs?
Yes, the 4.0% rate applies to domestic savings deposits, ordinary Non-Resident savings deposits, and savings deposits under the NRE Accounts Scheme.
When does the new rate become effective?
The directive takes immediate effect from May 3, 2011. Banks must implement the rate from that date.
Are any other deposit rates affected by this circular?
No. Only savings deposit rates are revised. All other instructions on deposit rates remain unchanged.