What changed
The definition of 'Bulk Deposit' under the Master Direction on Interest Rate on Deposits, 2016 has been revised. For Scheduled Commercial Banks (excluding RRBs) and Small Finance Banks, the threshold for single rupee term deposits classified as bulk deposits has been increased from ₹2 crore to ₹3 crore. For Local Area Banks, the threshold is now ₹1 crore, matching the existing rule for Regional Rural Banks.
What it means for you
Banks can now accept term deposits up to ₹3 crore (or ₹1 crore for LABs) without triggering bulk deposit pricing and reporting requirements. This gives lenders more flexibility in pricing deposits for mid-sized corporate and high-net-worth individual clients. It may also reduce compliance burden for deposits just above the old threshold.
What you must do
- Update your bank's internal policies and system parameters to reflect the new bulk deposit threshold of ₹3 crore for SCBs/SFBs and ₹1 crore for LABs.
- Communicate the revised definition to all deposit-taking branches and treasury teams immediately.
- Review and amend any customer-facing documents, rate sheets, and product brochures that reference the old ₹2 crore threshold.
- Ensure compliance with all other unchanged provisions of the Master Direction on Interest Rate on Deposits.
Who it affects
Scheduled Commercial Banks (excluding RRBs), Small Finance Banks, Local Area Banks, Deposit operations and treasury teams, Corporate and high-net-worth depositors
Does this change affect the definition of bulk deposits for Regional Rural Banks?
No, the threshold for RRBs remains unchanged at ₹1 crore. The revision applies only to Scheduled Commercial Banks (excluding RRBs), Small Finance Banks, and Local Area Banks.
When does this revised definition come into effect?
The circular states that the instructions come into force with immediate effect from June 7, 2024.
Are there any other changes to the Master Direction on Interest Rate on Deposits besides the bulk deposit threshold?
No, the circular explicitly states that all other instructions in this regard remain unchanged. Only the definition of bulk deposit has been revised as detailed in the annex.