RBI Draft Amendment: Banks Required To Publish Deposit Interest Rates In Advance, Differential Rates For Bulk Deposits

The Reserve Bank of India (RBI) issued draft amendment rules on June 5, 2026, for changing the deposit interest rate framework for banks. This is to provide them with more flexibility in pricing their bulk deposits and improve transparency by mandating advance disclosure of deposit (other than current account) rates. The bank has invited feedback on the amendment proposal ‘Reserve Bank of India (Interest Rate on Deposits) Amendment Directions, 2026’ from the general public and other stakeholders by June 20, 2026.

Under these draft amendment rules, the revised directions are regarding deposit interest rate disclosure and allowing differential interest rates for bulk FDs (rupee deposits) under the Liquidity Coverage Ratio (LCR) framework.

Interest Rate Disclosure In Advance

Currently, interest rates on deposits are payable by the banks as per their schedule disclosed in advance. But the amendment proposal makes the rules further clearer.

According to the proposed amended rule, the banks are required to disclose interest rates in advance on the bank’s website, and it should be ‘before the commencement of the Business Day’.

Interest Rate Differentiation

As of now, banks differentiate their FD interest rates based on the term of deposit, size of deposit, and availability or non-availability of the premature withdrawal option. Notably, they can offer non-callable (without premature withdrawal option) FDs only if they are of more than Rs 1 crore.

Differential Rates On Bulk Deposits

Though the banks are allowed to offer differential rates only on bulk deposits, the amendment proposal inserts a new rule in this regard.

Under this, for the domestic rupee deposits, run-off rates will apply under the LCR framework. The banks will have the ‘freedom to offer differential interest rates on bulk deposits, by considering the differential run-off rate applicable to deposits or unsecured wholesale funding from retail or non-retail customers, respectively, under the LCR framework’.  

Similarly, the rupee deposit of non-residents will also come under the run-off rates rule under the LCR framework.

Under the existing general guidelines, banks need to have a comprehensive policy approved by the Board of Directors or a Committee authorised by the Board, in respect of the deposit interest rates, penalty on premature withdrawal (both full and partial) from domestic, non-resident external (NRE) accounts, or foreign currency non-resident (FCNR) term deposits. And for bulk deposit, banks need to maintain the interest rate card in their Core Banking System to facilitate supervisory review.

Now, with differential rates, banks will have flexibility in pricing rupee bulk deposits and managing their liquidity well. The rate disclosure in advance will improve transparency in the interest rate application.    

These draft amendment directions are for all banks, including commercial banks, small finance banks (SFBs), regional rural banks (RRBs), payment banks, local area banks, and urban co-operative banks.  

One can submit the feedback either through the ‘Connect 2 Regulate’ option on the RBI website or by sending an email to the bank.

FAQs