RBI introduced new FD rules
New Delhi: The Reserve Bank of India (RBI) has announced new rules on how banks set and display interest rates on deposits. These new rules will come into effect from October 1. While the changes are not expected to increase or reduce fixed deposit (FD) returns immediately, they will make interest rates more transparent for customers. Banks will also get more flexibility in deciding rates for large deposits.
The new rules will apply to commercial banks, small finance banks, regional rural banks (RRBs), local area banks, payment banks and urban cooperative banks.
For people investing in retail fixed deposits, the biggest change is better transparency.
Under the new rules, banks must offer the same interest rate at all their branches for deposits of the same amount made on the same day. This means a customer opening the same FD at two different branches of the same bank should get the same interest rate.
The RBI has also said that banks cannot treat customers differently when they make similar deposits on the same date.
Banks will now have to publish their deposit interest rates on their websites in advance. They must also pay interest exactly as per the rates they have published.
These changes will make it easier for customers to compare FD rates before investing and reduce confusion caused by different rates at different branches.
The bigger change is for banks handling bulk deposits.
The RBI has allowed banks to set different interest rates for bulk deposits based on liquidity rules under the Liquidity Coverage Ratio (LCR) framework. The same rule will also apply to rupee deposits made by non-residents.
According to the RBI, this change will give banks more flexibility while keeping the process transparent.
The RBI has not asked banks to increase or reduce FD interest rates. Banks will continue to decide their rates based on their liquidity needs, funding costs, and overall market conditions.
