What changed
RBI replaced the term 'wholesale deposits' (₹15 lakh or higher) with 'bulk deposits' defined as single rupee term deposits of ₹1 crore and above. Differential interest rates on same-maturity deposits are now permitted only for bulk deposits of ₹1 crore and above, not for smaller deposits. Banks can now disallow premature withdrawal of bulk deposits (₹1 crore and above) for all depositors, including individuals and HUFs, provided they notify depositors in advance.
What it means for you
Banks must update their deposit product definitions and interest rate schedules to align with the new ₹1 crore threshold for bulk deposits. Lenders gain flexibility to restrict premature withdrawals on large deposits, reducing liquidity risk and interest rate exposure. However, they must clearly communicate this policy and penal rates to depositors upfront. For deposits below ₹1 crore, premature withdrawal remains mandatory, and interest rates must be uniform for same-maturity deposits.
What you must do
- Update internal policies and systems to define bulk deposits as single rupee term deposits of ₹1 crore and above, effective April 1, 2013.
- Revise interest rate schedules to offer differential rates only on bulk deposits of ₹1 crore and above; ensure uniform rates for deposits below this threshold.
- Communicate to depositors, in advance, any policy to disallow premature withdrawal on bulk deposits of ₹1 crore and above, including for individuals and HUFs.
- Disclose penal interest rates for premature withdrawal clearly to depositors at the time of deposit acceptance.
- Train staff and update customer-facing materials to reflect the new definitions and rules before the April 1, 2013 deadline.
Who it affects
All scheduled commercial banks (excluding RRBs), Depositors with rupee term deposits of ₹1 crore and above, Individuals and HUFs holding large term deposits, Bank treasury and ALM teams
What is the new definition of bulk deposit?
Effective April 1, 2013, a bulk deposit is a single rupee term deposit of ₹1 crore and above, replacing the earlier ₹15 lakh threshold for wholesale deposits.
Can banks now disallow premature withdrawal for all bulk deposits?
Yes, banks have discretion to disallow premature withdrawal for bulk deposits of ₹1 crore and above, including those of individuals and HUFs, provided they notify depositors of this policy in advance.
Are differential interest rates still allowed on deposits below ₹1 crore?
No, differential interest rates for same-maturity deposits are now permitted only on bulk deposits of ₹1 crore and above. For deposits below ₹1 crore, the same rate must apply for deposits of the same maturity.