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
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.