Master Circular on Certificates of Deposit (CDs) – 2012
Current · Source: Reserve Bank of India · RBI/2012-13/100 · issued 02 Jul 2012 · ~1 min read
Quick answerRBI consolidated all CD guidelines into a single master circular. CDs are negotiable money market instruments issued by scheduled banks (ex-RRBs/LABs) and select FIs, with minimum deposit of ₹1 lakh, maturity 7 days–1 year for banks, and 1–3 years for FIs.
The rule, in the simplest words
Certificates of Deposit (CDs) are short‑term, tradable money market tools that only scheduled banks (not RRBs or LABs) and certain financial institutions can issue.
Each CD must be for at least ₹1 lakh (or a higher multiple) and the time it lasts must be 7 days to 1 year for banks, or 1 to 3 years for those financial institutions.
The RBI did not add new rules; it simply put all earlier CD instructions together in one Master Circular so everyone has one clear reference.
If a CD’s interest rate can change (floating rate), the bank must clearly state the benchmark and how the rate will be reset.
When non‑resident Indians (NRIs) buy a CD, it must be on a non‑repatriable basis and this must be clearly written on the certificate.
How it plays out — a real example
Rohit, the CD issuance officer at a Mumbai scheduled bank, starts his day by opening the RBI Master Circular to confirm the latest rules. He receives a request from a corporate client for a ₹5 lakh CD lasting 6 months, so he checks that the amount meets the ₹1 lakh minimum and that the 6‑month term is within the bank’s 7‑day‑to‑1‑year window. He also notes that the client wants a floating‑rate CD, so Rohit records the benchmark rate and reset formula on the application, ensuring everything matches the Master Circular. The client is satisfied, and Rohit feels confident that he followed the single, up‑to‑date RBI guideline.
What changed
This is a consolidation of all existing CD guidelines into one master circular, replacing earlier circulars listed in the appendix. No new policy changes were introduced; it merely updates and compiles previous instructions for easier reference.
What it means for you
Banks and FIs now have a single reference document for CD issuance, reducing compliance ambiguity. The circular reaffirms existing rules: banks can issue CDs freely based on funding needs, while FIs must stay within their umbrella limit. Floating rate CDs are allowed with transparent benchmarks.
What you must do
Update internal CD issuance policies to reference this master circular as the governing document.
Ensure CD minimum deposit is ₹1 lakh and multiples thereof, and maturity complies with bank (7 days–1 year) or FI (1–3 years) limits.
Verify that NRI subscriptions are on non-repatriable basis and clearly marked on certificates.
For floating rate CDs, document the benchmark and reset formula transparently for investors.
Who it affects
Scheduled commercial banks (excluding RRBs and LABs), Primary Dealers (PDs), All-India Term Lending and Refinancing Institutions (FIs)
❓ Common questions
Can CDs be issued to NRIs?
Yes, but only on a non-repatriable basis, which must be clearly stated on the certificate. Such CDs cannot be endorsed to another NRI in the secondary market.
What is the minimum size of a CD?
The minimum deposit from a single subscriber is ₹1 lakh, and thereafter in multiples of ₹1 lakh.
Are floating rate CDs allowed?
Yes, banks and FIs can issue floating rate CDs, provided the rate reset methodology is objective, transparent, and based on a market benchmark. Investors must be clearly informed.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/100
IDMD.PCD. 05/14.01.03/2012-13
July 2, 2012
The Chairmen / Chief Executives of All Scheduled Banks (excluding RRBs and LABs),
Primary Dealers (PDs) and All-India Term Lending and Refinancing Institutions
Dear Sir/Madam,
Master Circular - Guidelines for Issue of Certificates of Deposit
With a view to further widening the range of money market instruments and giving investors greater flexibility in deployment of their short-term surplus funds, Certificates of Deposit (CDs) were introduced in India in 1989. Guidelines for issue of CDs are presently governed by various directives issued by the Reserve Bank of India, as amended from time to time.
2. A Master Circular incorporating all the existing guidelines / instructions / directives on the subject has been prepared for reference of the market participants and others concerned. It may be noted that this Master Circular consolidates and updates all the instructions / guidelines contained in the circulars listed in the Appendix as far as they relate to guidelines for issue of CDs. This Master Circular has also been placed on RBI website at http://www.mastercirculars.rbi.org.in .
Yours faithfully,
(K. K. Vohra)
Chief General Manager
Encl.: As above
Table of Content
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/100 · issued 02 Jul 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 (Scheduled commercial banks (excluding RRBs and LABs), Primary Dealers (PDs), All-India Term Lending and Refinancing Institutions (FIs)), your first concrete step on “Master Circular on Certificates of Deposit (CDs) – 2012” is: “Update internal CD issuance policies to reference this master circular as the governing document.” (RBI issued this 02 Jul 2012).
Circular: RBI/2012-13/100 -- Master Circular on Certificates of Deposit (CDs) – 2012
Issued: 02 Jul 2012
Action required: Update internal CD issuance policies to reference this master circular as the governing document.
Action required: Ensure CD minimum deposit is ₹1 lakh and multiples thereof, and maturity complies with bank (7 days–1 year) or FI (1–3 years) limits.
Action required: Verify that NRI subscriptions are on non-repatriable basis and clearly marked on certificates.
Action required: For floating rate CDs, document the benchmark and reset formula transparently for investors.
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=7397&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.
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