Reserve Bank of India (Rural Co-operative Banks – Interest Rate on Deposits) Directions, 2025 (Updated as on June 17, 2026)
UR
- Applies toRural co-operative banks
- StatusIn force
- ImportanceMUST READ
- IssuedNov 28, 2025
- Last amendedAug 25, 2026 · 2 incorporated
- Length33 points in 4 sections · 4 min read
The four dates on this rule
- PublishedNov 28, 2025The day RBI put this document out.
- Starts to applyJune 17, 2026The day this rule starts to apply, as RBI's own text states it.
- Time to get ready201 daysThe room between the day it was published and the day it starts to apply.
- Last date to actNot statedNo date to act by was found in this document. Other dates may sit inside single paragraphs.
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15 of the 33 points name no product and bind every product. All products.
Numbers to remember
| one lakh rupees | Up to one lakh rupees every savings account gets the same rate. Above that the bank may vary it. RBI Para 8(1) |
| seven days | No term deposit may run for less than seven days. RBI Para 9(1) |
| one crore | Every term deposit of one crore or less held by an individual or a family must allow early withdrawal. RBI Para 9(3) |
| one per cent | The bank may pay its own staff one per cent above the card rate. RBI Para 11 |
| sixty days | Interest on a foreign currency deposit is worked out on a year of three hundred and sixty days. RBI Para 30 |
What it says
Chapter I. Preliminary
1. Starts on the website date
The rules start on the day RBI puts them on its own website.
2. Who must follow this
These rules apply to every rural co-operative bank.
3. What a bulk deposit is
A bulk deposit is a single rupee term deposit of fifteen lakh or more.
BankPulse example. A rural co-operative bank takes a single rupee term deposit of ₹15 lakh from a trust. That is a bulk deposit, because the definition covers a single rupee term deposit of ₹15 lakh and above. Only on a bulk deposit may the bank offer a rate away from its published schedule.
Chapter II. General Guidelines (Interest Rate Framework)
1. Same rate everywhere
The rate offered must be the same at every branch and for every customer on the same day.
2. One board policy covers it
The board must approve one policy covering deposit rates and every premature withdrawal penalty.
Chapter III. Domestic Rupee Deposits
Must know
1. No interest on current accounts
A current account earns no interest.
2. One exception, on death
A dead depositor's current account earns the savings rate from the date of death until it is paid out.
3. Uniform rate to a lakh
Up to one lakh rupees every savings account gets the same rate. Above that the bank may vary it.
4. Seven days is the floor
No term deposit may run for less than seven days.
5. Different rates only in bulk
A bank may offer a different rate only on bulk deposits.
6. A crore and under breaks
Every term deposit of one crore or less held by an individual or a family must allow early withdrawal.
7. Broken early, paid pro rata
On early withdrawal the depositor gets the rate for the period the money actually stayed, not the booked rate.
8. Nothing before the floor
Break it before the minimum period and no interest is paid at all.
9. One per cent for staff
The bank may pay its own staff one per cent above the card rate.
10. Senior citizen schemes allowed
The bank may run term deposit schemes for resident senior citizens at higher fixed rates.
11. Not in a family name
The senior citizen rate is not available on a deposit standing in the name of a Hindu undivided family.
12. Retired staff can get both
A retired staff member who is a senior citizen may get the senior citizen rate on top of the staff rate.
13. Unclaimed on maturity
Money left after a term deposit matures earns the savings rate or the booked rate, whichever is lower.
14. Floating rates need a benchmark
A floating rate term deposit must follow a market benchmark anyone can observe.
15. No penalty on clean split
Splitting a dead depositor's deposit among claimants draws no penalty if the period and the total do not change.
Do it
16. Credit savings interest quarterly
Savings interest is credited every quarter, or at longer gaps.
17. Frozen accounts still get credited
A savings account frozen by the authorities must still be credited on the usual cycle.
18. A board policy for penalties
The board must approve the policy on premature withdrawal penalties, including partial ones.
19. Tell the depositor the penalty
The penalty must be explained when the deposit is taken. If it was not, no penalty may be charged.
Chapter IV. Rupee Deposits of Non-Residents
1. Non-resident rupee deposits
Only a bank authorised under the foreign exchange law may take these deposits.
2. No lien on NRE savings
The bank may not mark any lien, direct or indirect, on an NRE savings deposit.
3. Resident claimant, domestic rate
Where the claimant of a dead depositor's NRE deposit lives in India, the deposit becomes a domestic one on maturity.
Chapter V. Foreign Currency Deposits
1. A 360 day year
Interest on a foreign currency deposit is worked out on a year of three hundred and sixty days.
2. Paid every 180 days
Interest on a foreign currency deposit is paid every one hundred and eighty days, then for the days left.
3. Nothing before the foreign floor
Break a foreign currency deposit before its minimum period and no interest is paid.
Chapter VI. Prohibitions and Exemptions
1. No commission for deposits
The bank may pay no fee, commission or brokerage for bringing in deposits, apart from the named exceptions.
2. No prizes for deposits
No prize, lottery or free trip may be used to bring in deposits.
Chapter VII. Repeal and Other Provisions
1. The old instructions are gone
Every earlier instruction to rural co-operative banks on deposit rates stands repealed.
What RBI has fined people for under this rulebook
RBI has imposed 1 monetary penalty on this kind of lender. In each one its own stated reason names the subject of this rulebook. Each one links to the press release it was read from.
This tells you the rulebook RBI named. It does not tell you which of the points on this page was broken, because RBI does not say. Read the order itself before drawing any conclusion about your own bank.
Jul 23, 2026. Rajnandgaon Kendriya Sahakari Bank Maryadit, Rajnandgaon, Chhattisgarh — ₹1 lakh (Rupees One Lakh only). RBI press release
These come from RBI press releases. The penalty tracker holds them all. It also lists the penalties we could not place on any rulebook, and the reason for each one.
How this rule has changed
The points above are the rule as it stands today, after every change listed here.
Issued on Nov 28, 2025. This is the date RBI put the rule out.
Changed on Jun 17, 2026.
- NRE NRO deposit rate. Banks must not give higher rates on NRE or NRO deposits than on matching domestic rupee term deposits.
- NRO to NRE transfer. Transfers from NRO to NRE accounts do not get the temporary NRE deposit rate cap exemption.
Changed on Aug 25, 2026.
- Relaxation end date. The temporary deposit rate relaxations will now stop on August 31, 2026 instead of September 30, 2026.
- Immediate effect. These amendment directions apply at once from the time this circular is issued.
- Change in paragraph 24. Where paragraph 24(4)(1) mentions September 30, 2026, rural co-operative banks must now read August 31, 2026 instead.
- Change in paragraph 29. Where paragraph 29(7)(2) mentions September 30, 2026, rural co-operative banks must now read August 31, 2026 instead.
The same subject for other kinds of institution
The same subject for other kinds of institution.
Other RBI rules for rural co-operative banks
RBI Kisan Credit Card rules for rural co-operative banks 2026
RBI capital adequacy rules for rural co-operative banks 2025
RBI credit bureau reporting rules for rural co-operative banks 2025
RBI customer service and fair conduct rules for rural co-operative banks 2025
RBI digital banking channel rules for rural co-operative banks 2025
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