Banks to offer differential rate for term deposits

Interest rate will depend on kind of withdrawal facility availed by the customer

GN Bureau | April 16, 2015


#RBI   #reserve bank of India   #term deposits   #interest rate   #premature   #withdrawal  

The differential interest rates based on whether the term deposits are with or without the premature withdrawal facility come to India.

The Reserve Bank of India (RBI) has given green signal to banks to offer differential interest rates on deposits, allowing earning of higher interest rate if one goes for deposit without premature withdrawal facility. RBI said that banks can now offer early withdrawal of term deposits and differential interest rates can be offered to customers if they opt for such a feature. Customers who don't choose early withdrawal of their term deposits can be offered a different interest rate on their deposits.

Currently, banks do not follow any uniform code on whether to charge penalty on premature withdrawal of fixed deposits.

RBI also said that all term deposits of individuals held singly or jointly of Rs 15 lakh and below should have premature withdrawal facility. Besides that banks have been allowed to offer deposits without the option of premature withdrawal as well.

The regulator, however, said that banks which offer such term deposits should ensure that the customers are given the option to choose between term deposits with or without premature withdrawal facility.

Banks have been asked to disclose in advance the schedule of interest rates payable on deposits. They should also have a board approved policy with regard to interest rates on deposits including deposits with differential rates of interest and ensure that the interest rates offered are reasonable and available for supervisory review/scrutiny as and when required, the RBI said.

Banks are expected to announce their differential interest rates on such deposits.

Since January 2013, RBI had allowed banks to offer such differential interest rates on deposits that were less than, equal to, or over Rs 1 crore.

Comments

 

Other News

PSUs under steel ministry must share resources: Minister

Steel minister Chaudhary Birender Singh has directed a high-level coordination committee comprising CMDs and top ministry officials to be constituted for pooling and sharing of resources among PSUs.   He said, “This will lead to aggregation of demand and economies of sc

India seeks dispute panel against US at WTO

India has submitted its first request for establishment of a dispute panel against the US at the World Trade Organisation (WTO)—a request that was blocked by Washington on February 20 stating that this dispute was launched for purely political reasons. According to India, eleven measures ad

So what Pahlaj Nihalani, if there`s lipstick under the burkha

The Central Board of Film Certification seems to be fast turning into 16th century Italian theatre Commedia dell`arte, whose special characteristic is the lazzo - a joke. And Pahlaj Nihalani is the prima donna of all that is not right with the censor board. Nihalani, who is frequently quite

India needs policy measures to conform to global standards: Carnegie

India faces significant challenges in the area of trade policy— the global economic slowdown, increasing protectionism, the stalled mega-trade deals that could in time be revived, and perhaps more important, its own domestic preoccupations. For India to achieve its policy objectives, the government a

The power of a meal

In 2000, we set out on an uncharted journey. Neither did we have any strategy nor any idea about how far we could go. I still remember the day when we took the first meal to a government school. The children loved it. I did not believe that we would go with food the next day as well, but we did, and now we

Should Pahlaj Nihalani be axed as the chairperson of Central Board of Film Certification?

Should Pahlaj Nihalani be axed as the chairperson of Central Board of Film Certification?

Video

अखिलेश डूबते जहाज में जा बैठे - मोदी
Digital Transformation Summit

Current Issue

Opinion

Facebook    Twitter    Google Plus    Linkedin    Subscribe Newsletter

Twitter