What changed
RBI issued a master circular consolidating all previous directives on Certificates of Deposit (CDs) into a single reference document. The circular updates and replaces earlier circulars listed in the appendix, ensuring all guidelines are in one place. No new policy changes were introduced; this is a consolidation exercise.
What it means for you
Banks and FIs now have a single, authoritative source for CD issuance rules, reducing compliance confusion. The circular reaffirms existing norms: banks can issue CDs freely based on needs, while FIs must stay within the 100% net owned funds umbrella limit. NRIs can invest only on non-repatriable basis, and secondary market restrictions remain.
What you must do
- Update internal CD issuance policies to align with this master circular.
- Ensure CD documentation clearly states NRI investments are non-repatriable.
- Verify that FI CD issuance stays within the 100% net owned funds limit.
- Maintain CRR and SLR on the issue price of CDs as per existing requirements.
- Train treasury and compliance teams on the consolidated guidelines.
Who it affects
Scheduled commercial banks (excluding RRBs and LABs), All-India Financial Institutions permitted by RBI to issue CDs, Treasury departments of banks and FIs, Compliance officers handling money market instruments, Investors including NRIs subscribing to CDs
What is the minimum amount for a single CD subscription?
The minimum deposit from a single subscriber is Rs.1 lakh, 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 FIs?
Banks can issue CDs with a maturity of not less than 7 days and not more than 1 year. Financial Institutions (FIs) can issue CDs for a period of not less than 1 year and not exceeding 3 years from the date of issue.