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