RBI cuts interest rate on unclaimed deposits to 3%

RBI/2021-22/37 DoR.DEA.REC.No.16/30.01.002/2021-22 May 11, 2021 The Managing Director & CEO/ Chief Executive Officers All Scheduled Commercial Banks (including RRBs) Local Area Banks (LABs) Urban Co-operative Banks / State Co-operative Banks / District Central Co-operative Banks/ Small Finance Banks/Payments Banks Dear Sir/Madam, Banking Regulation Act, 1949 – Section 26A Depositor Education and Awareness Fund Scheme, 2014 – Interest rates payable on unclaimed interest bearing deposit Please refer to circulars DBOD.No.DEAF Cell.BC.126/30.01.002/2013-14 dated June 26, 2014 and DBR.DEA Fund Cell.BC.No.110/30.01.002/2017-18 dated June 07, 2018 wherein RBI had specified the rates of interest payable by banks to the depositors on the unclaimed interest bearing deposit amount transferred to the DEA Fund. 2. The rate of interest has since been reviewed and it has been decided that the rate of interest payable by banks to the depositors/claimants on the unclaimed interest bearing deposit amount transferred to the Fund shall be 3 per cent simple interest per annum with effect from the date of this circular. 3. Accordingly, all the banks are advised to calculate the interest payable on interest bearing deposits transferred to RBI at the rate of 4 per cent p.a. up to June 30, 2018, 3.5 per cent w.e.f. July 1, 2018 up to May 10, 2021 and at 3 per cent with effect from May 11, 2021 till the time of payment to the depositor/claimant. 4. The other contents of the circular dated June 26, 2014 remain unchanged. Yours faithfully, (Thomas Mathew) Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/37 · issued 11 May 2021. The plain-English explanation above is BankPulse’s own independent summary.

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