Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Directions, 2025

1. Starts on the website date

The rules start on the day RBI puts them on its own website.

2. A framework, not a rate

RBI sets the frame. The bank still decides its own deposit rates inside it.

3. Who must follow this

These rules apply to every payments bank.

4. What a current account is

A current account is a demand deposit that pays no interest and allows withdrawals at will.

5. Interest on the closing balance

Savings interest is worked out on the balance standing at the end of each day.

1. Same rate everywhere

The rate must be the same at every branch and for every customer on the same day.

2. Only the published schedule

Pay exactly what the published schedule says, and publish it in advance.

3. No bargaining over rates

A depositor cannot negotiate a better rate.

4. Open to supervisory review

Rates must be reasonable, consistent and open to RBI's inspection when asked for.

5. No interest on current accounts

A current account earns no interest.

6. One exception, on death

A dead depositor's current account earns the savings rate from the date of death until it is paid out.

7. Uniform rate to a lakh

Up to one lakh rupees every savings account gets the same rate.

8. Free to vary above that

On any end-of-day balance above one lakh the bank may set a different rate.

9. One per cent for staff

The bank may pay its own staff one per cent above the card rate on savings deposits.

10. Only while they qualify

The staff rate runs only as long as the person stays eligible for it.

11. Nothing extra on a merger

Staff taken over in an amalgamation cannot end up better off than the bank's own staff would have been.

12. One board policy

The board must approve the bank's policy on interest rate on deposits.

13. Round to the nearest rupee

Every interest payment on a deposit is rounded to the nearest rupee.

14. Credit savings interest quarterly

Savings interest must be credited every quarter or more often.

15. Frozen accounts still get credited

A savings account frozen by the authorities must still be credited on the usual cycle.

1. No commission for deposits

The bank may pay no fee, commission or brokerage for bringing in deposits.

2. Three named exceptions

Door-to-door collection agents, selling agents under outsourcing, and business correspondents may be paid.

3. No prizes for deposits

No prize, lottery or free trip may be used to bring in deposits.

4. A small gift is allowed

An inexpensive gift may be given when a deposit is accepted, within the limit the bankers' association set.

BankPulse example. A payments bank opens a savings account and wants to hand the depositor something. An inexpensive gift is allowed so long as it costs not more than ₹250, which is the figure the bankers' association set. A lucky draw for a holiday is a different thing altogether: it turns on chance, so it is out whatever it costs.

5. No unethical canvassing

The bank may not chase deposits through agents or third parties by unethical means.

6. No free money, no side-payment

Outside a current account the bank may not take an interest-free deposit or compensate the depositor indirectly.

7. Nothing through private financiers

The bank may not take deposits placed at the instance of private financiers or unincorporated bodies.

8. No savings account for departments

Government departments funded by budget allocations may not be given a savings account.

9. Money market deposits are outside

Deposits from institutions allowed in the call, notice and term money market are outside these rules.

10. So is delayed collection interest

Interest paid because the bank was slow collecting an instrument is outside these rules.

1. The old instructions are gone

Every earlier instruction to payments banks on deposit rates stands repealed.

2. Other laws still apply

These rules sit on top of every other law and do not replace any of them.

3. RBI has the last word

Where a provision is unclear, RBI may clarify it and its reading is final.