Current · Source: Reserve Bank of India · RBI/2012-13/347 · issued 24 Dec 2012 · ~1 min read
Quick answerRBI directs banks to pay SDS 1975 interest for CY 2012 at 8.6% p.a. (Jan-Mar) and 8.8% p.a. (Apr-Dec) via ECS/NECS/NEFT/RTGS or cheques on Jan 1, 2013. Follow earlier circular instructions.
The rule, in the simplest words
Banks must pay interest on SDS 1975 (a special savings scheme from 1975) for the year 2012 at two rates: 8.6% per year for January to March, and 8.8% per year for April to December.
This interest must be given to account holders on January 1, 2013, using electronic methods like ECS/NECS/NEFT/RTGS (ways to send money directly to a bank account) or by cheque (a paper slip that acts like money).
Banks must follow extra rules from an older circular (dated December 30, 2003) when making these payments.
Banks must tell all their deposit offices (branches that handle these accounts) about this rule and confirm to RBI (India's central bank) that they received the instruction.
How it plays out — a real example
A payments & clearing officer in Indore, Priya, checks her bank's SDS 1975 accounts on December 31, 2012. She calculates the interest for each depositor: 8.6% for the first three months and 8.8% for the rest of the year. On January 1, 2013, she uses NEFT to transfer the interest directly into each depositor's account, making sure the money arrives on time as the RBI rule requires.
What changed
RBI specified interest rates for the Special Deposit Scheme 1975 for calendar year 2012: 8.6% per annum for Q1 (Jan-Mar) and 8.8% per annum for the remaining nine months (Apr-Dec). Banks must disburse this interest on January 1, 2013, using electronic modes or account payee cheques, adhering to conditions from a 2003 circular.
What it means for you
Banks handling SDS 1975 accounts must ensure timely and accurate interest payment to depositors on the prescribed date. The step-up in rate from Q1 to Q2-Q4 reflects a change in applicable interest for the scheme. Non-compliance with disbursement timelines or modes could attract regulatory scrutiny.
What you must do
Disburse SDS 1975 interest for CY 2012 at 8.6% (Jan-Mar) and 8.8% (Apr-Dec) on January 1, 2013.
Use electronic modes (ECS/NECS/NEFT/RTGS) or account payee cheques for payment.
Issue instructions to all deposit offices and acknowledge receipt to RBI.
Refer to and comply with paragraphs 3 and 4 of circular CO.DT.No.15.01.001/H-3527/2003-04 dated Dec 30, 2003.
Who it affects
State Bank of India and its associates, Public sector banks listed in the circular, Deposit offices handling SDS 1975 accounts, SDS 1975 account holders
❓ Common questions
What are the interest rates for SDS 1975 for CY 2012?
Interest is 8.6% per annum from January 1 to March 31, 2012, and 8.8% per annum from April 1 to December 31, 2012.
When must the interest be paid to depositors?
Interest must be disbursed on January 1, 2013 itself.
Which payment modes are acceptable?
Electronic modes such as ECS, NECS, NEFT, RTGS, or account payee cheques are acceptable.
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/347
DGBA.CDD. No. H- 3415 /15.01.001 / 2012-13
December 24, 2012
The Chairman & Managing Director
Head Office
Government Accounts Department
State Bank of India / State Bank of Patiala
State Bank of Bikaner & Jaipur /State Bank of Travancore
State Bank of Hyderabad / State Bank of Mysore
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
Madam/Dear Sir,
Special Deposit Scheme 1975 –
Payment of interest for the calendar year 2012
Please refer to our letter DGBA.CDD.H-3986/15.01.001/2011-12 dated December 22, 2011, on the captioned subject.
2. In this connection, we advise that interest for the calendar year 2012 may be promptly disbursed to the SDS account holders, @ of 8.6% per annum from 1st January 2012 to 31st March 2012 and @ 8.8% per annum from 1st April 2012 to 31st December 2012, through electronic mode such as ECS/NECS/ NEFT/RTGS or by way of account payee cheques on January 01, 2013 itself , subject to instructions, as applicable now, contained in paragraphs 3 and 4 of our circular CO.DT.No.15.01.001/H-3527/2003-04 dated December 30, 2003.
3. Please issue suitable instructions to all your Deposit Offices and acknowledge receipt.
Yours faithfully,
(Surendra Prasad)
Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/347 · issued 24 Dec 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, Public sector banks listed in the circular, Deposit offices handling SDS 1975 accounts, SDS 1975 account holders), your first concrete step on “SDS 1975 Interest Payment for CY 2012” is: “Disburse SDS 1975 interest for CY 2012 at 8.6% (Jan-Mar) and 8.8% (Apr-Dec) on January 1, 2013.” (RBI issued this 24 Dec 2012).
Circular: RBI/2012-13/347 -- SDS 1975 Interest Payment for CY 2012
Issued: 24 Dec 2012
Action required: Disburse SDS 1975 interest for CY 2012 at 8.6% (Jan-Mar) and 8.8% (Apr-Dec) on January 1, 2013.
Action required: Use electronic modes (ECS/NECS/NEFT/RTGS) or account payee cheques for payment.
Action required: Issue instructions to all deposit offices and acknowledge receipt to RBI.
Action required: Refer to and comply with paragraphs 3 and 4 of circular CO.DT.No.15.01.001/H-3527/2003-04 dated Dec 30, 2003.
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=7770&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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