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)
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.