Reserve Bank of India (Commercial Banks – Interest Rate on Deposits) Directions, 2025
UR
- Applies toCommercial banks
- StatusIn force
- ImportanceMUST READ
- IssuedNovember 28, 2025
- Last amendedAug 25, 2026 · 3 incorporated
- Length31 points in 5 sections · 3 min read
The four dates on this rule
- PublishedNovember 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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21 of the 31 points name no product and bind every product. All products.
Numbers to remember
| ₹1 lakh | A single interest rate must apply to savings balances up to ₹1 lakh. RBI Para 9(1) |
| seven days | A bank must offer term deposits with a minimum tenor of seven days. RBI Para 10(1) |
| ₹1 crore | Term deposits of ₹1 crore or below held by individuals must allow premature withdrawal. RBI Para 10(3) |
| one year | An NRE deposit closed before one year earns no more than the RFC savings rate. RBI Para 27(7) |
| five years | A bank cannot accept or renew FCNR(B) deposits for more than five years. RBI Para 32(2) |
| six months | Floating rate deposits must have their interest reset every six months. RBI Para 32(5) |
| 360 days | Interest under the scheme is worked out on a year of 360 days. RBI Para 33 |
| 180 days | Interest on these deposits is calculated and paid at intervals of 180 days. RBI Para 34 |
| June 17, 2026 | An amendment dated June 17, 2026 changed NRE and FCNR(B) deposit rate rules. RBI Para 48 |
What it says
Chapter I. Preliminary
1. Start date
These Directions took effect the day RBI placed them on its website.
2. Who is covered
This rule applies to commercial banks, called 'banks' here.
3. Foreign branches excluded
These Directions do not apply to foreign branches of Indian banks.
Chapter II. General Guidelines (Interest Rate Framework)
1. No bargaining on rates
Deposit rates cannot be negotiated between the depositor and the bank.
2. Board-approved deposit policy
The Board of Directors must approve the bank's policy on deposit interest rates.
Chapter III. Domestic Rupee Deposits
Must know
1. One rate to one lakh
A single interest rate must apply to savings balances up to ₹1 lakh.
BankPulse example. One customer keeps Rs 20,000 in a savings account. Another keeps Rs 90,000. Both balances are up to Rs 1 lakh, so both must earn the same rate of interest.
2. Seven-day minimum term
A bank must offer term deposits with a minimum tenor of seven days.
3. Early withdrawal right
Term deposits of ₹1 crore or below held by individuals must allow premature withdrawal.
Do it
4. Frozen accounts still earn
Interest on savings accounts must be credited even when the account is frozen by authorities.
5. Board policy on penalties
The Board must approve a policy on penalties for premature withdrawal of term deposits.
6. Penalty disclosure duty
A bank must tell depositors the penalty terms when it accepts the deposit.
Background
7. No current account interest
A bank pays no interest on money held in current accounts.
8. No interest before minimum
No interest is paid if a deposit is withdrawn before the minimum period.
9. Federations get no extra
Employee federations without direct employee members get no additional interest.
Chapter IV. Rupee Deposits of Non-Residents
1. One crore and below
NRE and NRO term deposits of ₹1 crore and below must allow premature withdrawal.
2. NRE rates are capped
Rates on NRE and NRO deposits cannot exceed those on comparable domestic rupee deposits.
3. Early NRE closure capped
An NRE deposit closed before one year earns no more than the RFC savings rate.
4. No lien on NRE
A bank cannot mark any lien, direct or indirect, against NRE savings deposits.
5. No staff rate abroad
Extra interest for staff or senior citizens is not available on NRE and NRO deposits.
Chapter V. Foreign Currency Deposits
1. FCNR(B) five-year cap
A bank cannot accept or renew FCNR(B) deposits for more than five years.
2. Reset every six months
Floating rate deposits must have their interest reset every six months.
3. Year of 360 days
Interest under the scheme is worked out on a year of 360 days.
4. Paid every 180 days
Interest on these deposits is calculated and paid at intervals of 180 days.
Chapter VII. Repeal and Other Provisions
Must know
1. June 2026 amendment
An amendment dated June 17, 2026 changed NRE and FCNR(B) deposit rate rules.
Background
2. Older rules cancelled
This document cancels the earlier conduct rules for these institutions.
3. Earlier repeals stand
Guidelines already repealed before these Directions stay repealed.
4. Old rules stay repealed
Rules repealed before this document was issued remain repealed.
5. Old actions preserved
Anything already done under the old rules stays governed by those old rules.
6. Approvals carried over
Approvals given under the cancelled rules are now treated as given under these rules.
7. Other laws still apply
These Directions add to other laws. They do not replace any of them.
8. RBI's reading final
RBI's interpretation of any part of these Directions is final and binding.
What RBI has fined people for under this rulebook
RBI has imposed 5 monetary penalties 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.
Aug 14, 2026. IndusInd Bank Limited — ₹59.20 lakh (Rupees Fifty-Nine lakh twenty thousand only). RBI press release
Mar 27, 2026. Bank of India — ₹58.50 lakh (Rupees Fifty Eight Lakh Fifty Thousand only). RBI press release
May 02, 2025. Bank of Baroda — ₹61.40 lakh (Rupees Sixty One Lakh Forty Thousand only). RBI press release
Feb 07, 2025. Federal Bank Limited — ₹27.30 lakh (Rupees Twenty Seven Lakh Thirty Thousand only). RBI press release
Jan 24, 2025. Canara Bank — ₹1,63,60,000 (Rupees One crore sixty three lakh sixty thousand 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 November 28, 2025. This is the date RBI put the rule out.
Changed on Jun 17, 2026.
- NRE NRO rate cap. Banks must not pay higher rates on NRE or NRO deposits than on similar domestic rupee term deposits.
- FCNR three to five years. For FCNR deposits of three to five years, banks must not exceed the stated benchmark plus 350 basis points.
- NRO to NRE transfers. If money moves from NRO to NRE, that deposit does not get the temporary NRE interest cap exemption.
Changed on Jul 30, 2026.
- start date. These amendment rules apply from October 01, 2026.
- follow website rates. Banks must pay deposit interest only as per rates already shown on their own website.
- bulk rate timing. Banks must show bulk deposit interest rates online by 10:10 am on every business day.
Changed on Aug 25, 2026.
- Temporary relaxation period. The earlier end date September 30, 2026 is now changed to August 31, 2026 for the temporary relaxations.
- Immediate effect. These amendment rules apply at once from the time of issue.
- Change in paragraph 27(4). In paragraph 27(4)(1), the period now ends on August 31, 2026 instead of September 30, 2026.
- Change in paragraph 32(7). In paragraph 32(7)(2), the period now ends on August 31, 2026 instead of September 30, 2026.
The same subject for other kinds of institution
The same subject for other kinds of institution.
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