RBI revises norms for bulk deposits

The Reserve Bank of India (RBI) has revised the rules for bulk deposits, offering differential interest rates, which would be applicable with effect from April 1, 2012. As per the revised rules:

  • A depositor will be allowed to withdrawal a term-deposit before completion of the period of the deposit agreed upon at the time of making a deposit.
  • Banks shall have the freedom to determine its own penal interest rate of premature withdrawal of term deposits.
  • Depositors must be informed by the bank about the applicable penal rate along with the deposit rate.
  • However, the banks will still have the discretion to deny the premature withdrawal of large rupee term deposits of Rs.1 crore and above. The bank should, however, notify such depositors of its policy of disallowing premature withdrawal in advance, at the time of accepting such deposits.
  • Banks can charge different rates of interest only on bulk deposits of above Rs.1 crore and above compared to the previous limit of Rs.15 lakh and above. For deposits below Rs.1 crore of the same maturity, the same rate will apply.
  • Interest rates paid by the bank should be as per the schedule and should not be subject to negotiation b/w the depositor and the bank.



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