The Reserve Bank of India (RBI) October 26, 2023, issued a notification regarding the Non-Callable Deposits - Master Direction on Interest Rate on Deposits.
The following has been stated: -
•Banks have been permitted to offer domestic term deposits (TDs) without a premature withdrawal option, provided that all TDs accepted from individuals for an amount of Rupees fifteen lakh and below shall have a premature withdrawal facility. Further, the banks have also been permitted to offer differential rates on interest on TDs based on the non-callability of deposits (i.e., non-availability of premature withdrawal option) in addition to the tenor and size of deposits.
•On a review, it has been decided that (i) the minimum amount for offering non-callable TDs may be increased from Rupees fifteen lakh to Rupees one crore i.e., all domestic term deposits accepted from individuals for amounts of Rupees one crore and below shall have premature-withdrawal-facility and (ii) these instructions shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.
•Accordingly, the relevant sections of the Master Direction have been amended as indicated in the Annex.
•All other instructions shall remain unchanged.
•This circular is applicable to all Commercial Banks and Co-operative Banks.
•These instructions shall come into force with immediate effect.
Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016
https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10296
Master Direction - Reserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016
https://rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10394
The detailed notification is given in the document attached below.
[Notification No. RBI/2023-24/74 DOR.SPE. REC. No 51/13.03.000/2023-24]
