Differential interest rates only on term deposits above Rs 1 cr

PTIUpdated: Saturday, June 01, 2019, 11:17 PM IST
article-image

Mumbai : The Reserve Bank has tightened norms for differential interest rates asking banks to offer them only on term deposits of Rs 1 crore or more, and permitted them to refuse premature withdrawal of such deposits.

“The permission to offer varying rates of interest for deposits of the same maturity shall apply to single Rupee term deposits of Rs 1 crore and above,” the RBI said in a notification. The changes will be applicable from April1.  For deposits below Rs 1 crore of the same maturity, RBI said, the same rate will apply.

On premature withdrawal of large size term deposit, it said: “The bank at its discretion, may disallow premature withdrawal of large Rupee term deposits of Rs 1 crore and above” of all depositors, including deposits by individuals and Hindu Undivided Families (HUFs).

Banks shall have the freedom to determine its own penal interest rate of premature withdrawal of term deposits, it added.

RBI also said that henceforth the expression “bulk deposit” would be used for deposits of Rs 1 crore and above.

 As of now, the term “bulk deposit”, though not specifically defined, has been interchangeably used with “wholesale deposits” — deposits of Rs 15 lakh or above.  “Interest paid by banks should be as per the schedule and not be subject to negotiation between the depositor and the bank,” RBI added.                  — PTI

(To receive our E-paper on whatsapp daily, please click here. To receive it on Telegram, please click here. We permit sharing of the paper's PDF on WhatsApp and other social media platforms.)

RECENT STORIES

Mumbai: Shinde-Fadnavis govt courts sorry figure after Speaker reserves question for want of detail...

Mumbai: Shinde-Fadnavis govt courts sorry figure after Speaker reserves question for want of detail...

Jhanvi Kukreja murder case: Court allows victim's mother to assist prosecution

Jhanvi Kukreja murder case: Court allows victim's mother to assist prosecution

Navi Mumbai: No street lights for 10 km stretch between Vashi Toll Plaza and CBD Belapur for 2...

Navi Mumbai: No street lights for 10 km stretch between Vashi Toll Plaza and CBD Belapur for 2...

Raigad gun scare: High alert sounded ahead of Dahi Handi and upcoming Ganapati festival, says...

Raigad gun scare: High alert sounded ahead of Dahi Handi and upcoming Ganapati festival, says...

Customs digs out 4.5 kg gold in 24 hrs at Mumbai airport

Customs digs out 4.5 kg gold in 24 hrs at Mumbai airport