Current · Source: Reserve Bank of India · RBI/2011-12/592 · issued 06 Jun 2012 · ~1 min read
Quick answerRBI notifies two interest rate hikes on Special Deposit Scheme (SDS) 1975 for non-government provident, superannuation, and gratuity funds: 8.6% from Dec 1, 2011, and 8.8% from Apr 1, 2012, until further orders.
The rule, in the simplest words
Banks must pay 8.6% interest on SDS 1975 deposits from December 1, 2011.
Banks must pay 8.8% interest on SDS 1975 deposits from April 1, 2012.
These rates are for non-government provident (retirement savings), superannuation (pension), and gratuity (lump-sum retirement benefit) funds.
Banks must update their computer systems and tell customers about the new rates, even for past dates.
How it plays out — a real example
A branch operations officer in Indore, Priya, manages SDS 1975 deposits for a local company's gratuity fund. She updates her bank's interest rate tables to 8.6% from December 1, 2011, and 8.8% from April 1, 2012, then recalculates the interest already paid to ensure the fund gets the correct amount, and sends a friendly letter to the company's finance manager explaining the change.
What changed
The Government of India revised interest rates on SDS 1975 deposits. From December 1, 2011, the rate was set at 8.6% per annum. From April 1, 2012, it was further increased to 8.8% per annum, effective until further orders.
What it means for you
Banks handling SDS deposits for non-government provident, superannuation, and gratuity funds must apply the new rates retrospectively from the specified dates. This impacts interest payouts and accounting for these funds, requiring updates to systems and customer communications.
What you must do
Update interest rate tables for SDS 1975 deposits to 8.6% from Dec 1, 2011, and 8.8% from Apr 1, 2012.
Issue instructions to all deposit offices to apply revised rates on eligible accounts.
Adjust interest accruals and payouts for the retrospective effective dates.
Acknowledge receipt of this circular to RBI's DGBA department.
Who it affects
State Bank of India and its associates, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India
❓ Common questions
What is the Special Deposit Scheme (SDS) 1975?
It is a government scheme for non-government provident, superannuation, and gratuity funds, allowing them to deposit surplus funds with the government at notified interest rates.
When do the new interest rates take effect?
The 8.6% rate applies from December 1, 2011, and the 8.8% rate applies from April 1, 2012, until further orders.
Which banks are required to implement these changes?
All scheduled commercial banks listed in the circular, including SBI and its associates, public sector banks, and others handling SDS deposits.
📜 Read the original circular — full text as issued by RBI
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2011-12/592 · issued 06 Jun 2012. 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 (State Bank of India and its associates, Allahabad Bank, Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Corporation Bank, Dena Bank, Indian Bank, Indian Overseas Bank, Oriental Bank of Commerce, Punjab National Bank, Syndicate Bank, UCO Bank, Union Bank of India, United Bank of India), your first concrete step on “SDS 1975 Interest Rate Revision: 8.6% and 8.8%” is: “Update interest rate tables for SDS 1975 deposits to 8.6% from Dec 1, 2011, and 8.8% from Apr 1, 2012.” (RBI issued this 06 Jun 2012).
Action required: Update interest rate tables for SDS 1975 deposits to 8.6% from Dec 1, 2011, and 8.8% from Apr 1, 2012.
Action required: Issue instructions to all deposit offices to apply revised rates on eligible accounts.
Action required: Adjust interest accruals and payouts for the retrospective effective dates.
Action required: Acknowledge receipt of this circular to RBI's DGBA department.
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=7261&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.