The Reserve Bank of India (RBI) on Friday released draft amendments to its deposit interest rate directions, proposing to allow banks in offering differential interest rates on bulk deposits by taking into account the liquidity treatment of such deposits under the Liquidity Coverage Ratio (LCR) framework.
Under the draft amendment, banks can offer different interest rates on bulk deposits based on the differential run-off rates applicable to deposits or unsecured wholesale funding from retail and non-retail customers under the RBI’s Asset Liability Management (ALM) Directions, 2025.
The proposed changes would apply to both domestic rupee bulk deposits and rupee deposits of non-residents.
“A bank shall have the freedom to offer differential interest rate 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,” the draft amendment said.
The RBI has proposed stricter disclosure requirements for deposit rates. Under the revised framework, banks will be required to disclose their schedule of deposit interest rates in advance on their websites before the commencement of the business day.
At present, banks disclose deposit rates on their websites, but the amendment seeks to ensure that applicable rates are transparently published before the start of each business day.
The draft amendments will come into effect from the date of issuance after stakeholder feedback and final notification by the central bank.
