RBI revises deposit interest rate rules: What fixed deposit investors should know before investing from October 1 — SkimNews
SkimNews Take
Bulk-deposit pricing freedom lets banks compete where they don't have to, so retail FDs may keep lagging market rates even as new disclosure rules improve transparency.
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- Reserve Bank of India overhauled the framework governing bank deposit interest rates, with the revised directions effective October 1 after a draft was floated in June 2026 and later postponed for compliance time
- The new directions apply to commercial banks, small finance banks, regional rural banks, local area banks, payment banks and urban cooperative banks
- Banks must now offer identical interest rates across all branches for deposits of similar amount accepted on the same day, with no discrimination between customers on identical deposits
- Banks must publish their schedule of deposit interest rates on their websites in advance, and interest paid must strictly follow the published schedule
- For bulk deposits, banks must upload applicable interest rates on their websites by 10:00 am every business day, with a grace period until 10:10 am
- RBI allowed banks to offer differential interest rates on bulk deposits based on the run-off rates applicable under the Liquidity Coverage Ratio (LCR) framework, and extended the same flexibility to non-resident rupee deposits
- The revised framework does not mandate any increase or reduction in FD interest rates — banks retain discretion based on liquidity requirements, funding costs, and market conditions
Why it matters: Retail FD investors gain branch-level pricing uniformity and advance visibility into published deposit rates from October 1, but face no mandated change in the level of returns. Banks gain meaningful new pricing flexibility on bulk and non-resident rupee deposits under the LCR framework, which could reshape how large-ticket and cross-border deposits compete for funding.
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