TaxTMI 
TaxTMI 
Master Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016
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....initions (a) In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: (i) "Bulk Deposit" means : * Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial Banks other than Regional Rural banks * Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs. (ii) "Composite Cash Credit" means a type of loan product having a cash credit limit with a fully savings module designed to take care of farmer's interest. (iii) "Current Account" means a form of non-interest bearing demand deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount. and shall also be deemed to include other deposit accounts which are neither Savings Deposit nor Term Deposit; (iv) "Daily product" means the interest applied on the end of day balance. (v) "Demand deposit" means a deposit received by the bank, which is withdrawable on demand; (vi) "Domestic Rupee Deposits" mean rupee deposits maintained in India in the form of current account, savings deposits or term deposit. (vii) "Family" includes members as mentioned i....
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....serve Bank of India Act, or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be. CHAPTER - II GENERAL GUIDELINES 4. Interest Rate framework Scheduled commercial banks shall pay interest on deposits of money (other than current account deposits) accepted by them or renewed by them in their Domestic, Ordinary Non-Resident (NRO), Non-Resident (External) Accounts (NRE) and Foreign Currency (Non-resident) Accounts (Banks) Scheme {FCNR(B)} deposit account on the terms and conditions specified in these directions: (a) There shall be a comprehensive policy on interest rates on deposits duly approved by the Board of Directors or any committee of the Board to which powers have been delegated. (b) The rates shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices. (c) Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance (d) The rates shall not be subject to negotiation between the depositors....
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....ce up to Rupees one lakh, irrespective of the amount in the account within this limit. * Differential rates of interest may be provided for any end-of-day savings bank balance exceeding Rupees one lakh. 7. Interest Rates on domestic Term Deposits (a) In addition to the conditions laid down in section 4 of these Directions, interest rates on term deposits shall vary only on account of one or more of the following reasons: (i) Tenor of Deposits: Banks shall have the freedom to determine the maturity/tenor of the deposit subject to the condition that minimum tenor of the deposit offered shall be seven days. (ii) Size of Deposits Differential interest rate shall be offered only on bulk deposits. Provided that differential interest shall not be applicable on deposit schemes framed on the basis of the Bank Term Deposit Scheme, 2006 or the deposits received under the Capital Gains Accounts Scheme, 1988. (iii) Non- availability of Premature withdrawal option Banks shall have the freedom to offer term deposits without premature withdrawal option. Provided that all term deposits accepted from individuals (held singly or jointly) for amount of Rupees fifteen lakh and below shall h....
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....r members of his/her family; or * the spouse of a deceased member or a deceased retired member of the bank's staff; and * an Association or a fund, members of which are members of the bank's staff; (b) Scheduled Commercial Banks shall, at their discretion, formulate term deposit schemes specifically for resident Indian senior citizens, offering higher and fixed rates of interest as compared to normal deposits of any size. Provided that this facility is not offered on the term deposit standing in the name of an HUF or the Karta of the Hindu Undivided Family (HUF), even if the Karta is a resident Indian senior citizen. (c) Scheduled Commercial Banks shall, at their discretion, give their resident Indian retired staffs, who are senior citizens, the benefit of additional interest rates as admissible to senior citizens over and above the additional interest payable to them by virtue of their being retired members of the banks' staff. 9. Interest on overdue domestic deposits (a) The rate of interest to be paid on renewal of overdue term deposits shall be subject to the stipulation contained in the section 4 of these Directions. (b) If a Term Deposit matures and proceeds are unp....
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....nder NRE/NRO deposit scheme shall be on the terms and conditions specified in the ensuing paragraphs: (a) The interest rates shall be subject to the conditions laid down in section 4 of these Directions. (b) Interest rates on savings deposits under Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits shall be in accordance with section 6 of these Directions. (c) Interest rates on NRE/NRO term deposits shall vary only on account of one or more of the following reasons: (i) Tenor of Deposits: Banks shall have the freedom to determine the maturity/tenor of the deposit subject to the condition that minimum tenor of NRE term deposits shall be one year and that of NRO term deposits shall be seven days. (ii) Size of Deposits Differential interest rate shall be offered only on bulk deposits (d) Interest rates on NRE/ NRO deposits shall not be higher than those offered by the banks on comparable domestic rupee term deposits. (e) The benefit of additional interest rate on deposits on account of being bank's own staff or senior citizens shall not be available to NRE and NRO deposits. (f) Interest on savings deposits shall be credited at quarterly or sho....
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....s: (i) Tenor of deposits The maturity period for term deposits under the FCNR (B) scheme shall be as under: * One year and above but less than two years * Two years and above but less than three years * Three years and above but less than four years * Four years and above but less than five years * Five years only Provided that, no bank shall accept or renew FCNR (B) deposits over five years and no recurring deposits shall be accepted under the FCNR (B) Scheme. (ii) Size of deposits Scheduled Commercial Banks shall, at their discretion, decide the currency-wise minimum quantum on which differential rates of interest may be offered. (c) The interest rates on all deposits, including where differential rates of interest are offered, shall be subject to the overall ceiling prescribed at 19 (g) below. (d) Interest on floating rate deposits shall be paid within the ceiling of swap rates for the respective currency/ maturity and in case of fixed rate deposits, interest shall be paid within the ceiling of LIBOR rates for the respective currency/ maturity. (e) The interest reset period shall be six months for all floating rate deposits. (f) The LIBOR/SWAP rates as on the ....
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.... not at the contracted rate but at the rate applicable to the period for which the deposit remained with the bank and without charging penalty for pre-payment; * In case the depositor dies before the date of maturity of the deposit but the amount of the deposit is claimed after the date of maturity, interest shall be paid at the contracted rate till the date of maturity and simple interest at the applicable rate operative on the date of maturity for the period for which the deposit remained with the bank beyond the date of maturity. * In case of death of the depositor after the date of maturity of the deposit, the interest rate operative on the date of maturity in respect of savings deposits held under Resident Foreign Currency (RFC) Account Scheme shall be paid from the date of maturity till the date of payment. * In case the claimants are residents, the maturity proceeds shall be converted into Indian Rupees on the date of maturity and interest shall be paid for the subsequent period at the rate applicable to a domestic term deposit of similar maturity. 23. Payment of interest on FCNR (B) deposits of NRIs on return to India Scheduled commercial banks may, at their discret....
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....e amount of term deposit at the request from the claimant/s, no penalty for premature withdrawal of the term deposit shall be levied if the period and aggregate amount of the deposit do not undergo any change. (d) Scheduled Commercial Banks shall, at their discretion, levy penalty to recover the swap cost in the case of premature withdrawal of FCNR(B) deposits. (e) No penalties shall be levied in the case of premature conversion of balances held in FCNR (B) deposits into RFC Accounts by Non-Resident Indians on their return to India. (f) No penalty for premature withdrawal shall be levied, where depositors of the branch as mentioned in section 4(h) of this direction desires premature withdrawal of deposit consequent to the transfer of business to another bank. 27. Resident Foreign Currency Accounts Scheme A Scheduled Commercial Bank shall have the freedom to determine interest on deposits of money accepted by it or renewed by it under the Resident Foreign Currency Account Scheme, in accordance to the comprehensive policy on interest rates on deposits duly approved by the Board of Directors or any committee of the Board to which powers have been delegated. CHAPTER - VI PROHIBI....
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....e bank: * from the institutions permitted to participate in the Call/Notice/Term Money Market both as lenders and borrowers. * for which it has issued a participation certificate; * under the Capital Gains Accounts Scheme, 1988, framed by the Government of India in pursuance of sub-section (2) of Section 54, sub-section (2) of Section 54B, sub-section (2) of Section 54D, sub-section (4) of Section 54F and sub-section (2) of Section 54G of the Income-Tax Act, 1961; and * under the Certificate of Deposit Scheme. (b) Payment of interest on delayed collection of outstation instruments like cheques, drafts, bills, telegraphic/mail transfers, etc. SCHEDULE- I (1) Primary Co-operative Credit Society which is being financed by the bank. (2) Khadi and Village Industries Boards. (3) Agriculture Produce Market Committees. (4) Societies registered under the Societies Registration Act, 1860 or any other corresponding law in force in a State or a Union Territory except societies registered under the State Co-operative Societies Acts and specific state enactment creating Land Mortgage Banks. (5) Companies licensed by the Central Government under Section 8 of Companies Act, 201....
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....rket and Bills Rediscounting Scheme - Primary Dealers 9 DBOD. No.FSC.BC.01/24.91.001/2001-02 05.07.2001 Permission to Participate in Call/ Notice Money Market and Bills Rediscounting Scheme - Private Sector Mutual Funds 10 DBOD.No.FSC.BC.30/24.91.001/2001-02 28.09.2001 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - Private Sector Mutual Funds 11 DBOD.No.FSC.BC.31/24.92.001/2001-02 28.09.2001 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscountinq Scheme - Primary Dealers 12 DBOD.No.FSC.BC.41/24.91.001/2001-02 01.11.2001 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - Private Sector Mutual Funds 13 DBOD.No.FSC.BC.49/24.92.001/2001-02 24.11.2001 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscounting Scheme - Primary Dealers 14 DBOD.No.FSC.BC.51/24.92.001/2001-02 04.12.2001 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscounting Scheme - Primary Dealers 15 DBOD.No.FSC.BC.85/24.92.001/2001-02 03.04.2002 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscounting Scheme - Primar....
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....elating to Individuals (Non-business) 32 DBOD No.Dir.53&54/13.03.00/2004-05 01.11.2004 Interest rates on Non-Resident (External) Rupee(NRE) Deposits 33 DBOD No.Dir.48/13.03.00/2005-06 17.11.2005 Interest Rate on Non-Resident (External) Rupee (NRE) Deposits 34 DBOD.No.BL.BC.58/22.01.001/2005-06 25.01.2006 Financial Inclusion by Extension of Banking Services - Use of Business Facilitators and Correspondents 35 DBOD No. Dir. 62/13.03.00/2005-06 08.02.2006 Interest Rates on Non-Resident Deposits 36 DBOD No. Dir. 80/13.03.00/2005-06 18.04.2006 Interest Rate on Non-Resident (External) Rupee (NRE) Deposits 37 DBOD.No.Dir.BC.54&55/13.03.00/2006-07 31.01.2007 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) deposits 38 DBOD.No.Dir.BC.70/13. 01.01/2006-07 30.03.2007 Rounding off cheques to the nearest rupee 39 DBOD.No.Dir.BC.88&89/13.03.00/2006-07 24.04.2007 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) deposits 40 DBOD No.Dir.BC.39/13.03.00/2007-08 25.10.2007 Deposit schemes with lock-in period 41 DBOD.No.Leg.BC.47/09.07.005/2008-09 19.09.2008 Payment of interest on accounts frozen by banks 42 D....
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....urance Society (AFGIS) *The circular dated November 4, 2000 replaces the basic directive dated December 27, 1985 and incorporates all amendments made/instructions issued upto that date. B. List of circulars on Interest Rates on FCNR(B) Deposits Sl Circular No. Date Subject 1 DBOD.No.Dir.BC.63&64/13.03.00/2000-01 03.01.2001 Foreign Currency (Non-Resident) Accounts (Banks) Scheme 2 DBOD.No.Dir.BC.105&107/13.03.00/2000-01 19.04.2001 Foreign Currency (Non-Resident) Accounts (Banks) Scheme 3 DBOD.No.Dir.BC.09/13.03.00/2001-02 11.08.2001 Deposits held in FCNR(B) Accounts 4 DBOD.No.Dir.BC.97&98/13.03.00/2001-02 29.04.2002 Interest Rate on FCNR(B) Deposits 5 DBOD.No.Dir.BC.30&31/13.03.00/2002-03 08.10.2002 Interest Rate on FCNR(B) Deposits 6 DBOD.No.Dir.BC.51/13.03.00/2004-05 01.11.2004 Mid- term Review of Annual Policy Statement for the year 2004-05 - Foreign Currency Non-Resident (Banks) Accounts 7 Mailbox clarification 13.05.2005 Clarification on Payment of Additional Interest on NRE / FCNR(B) Deposits of Banks' Staff Members / Senior Citizens 8 DBOD.No.Dir.BC.22/13.03.00/2005-06 26.07.2005 FCNR (B) Deposit Scheme 9 Mailbox clarification 29....