RBI proposes to review limit of Bulk Deposits

The Reserve Bank Of India (RBI) has stated in its latest monetary policy update that banks have discretion to offer differential rate of interest on the bulk deposits as per their requirements and Asset-Liability Management (ALM) projections. The bulk deposits limit was enhanced in the year 2019 for Scheduled Commercial Banks (SCBs) (excluding Regional Rural Banks) and Small Finance Banks (SFBs) as Single Rupee term deposits of Rs 2 crore and above. On a review, it is proposed to revise the definition of bulk deposits as Single Rupee term deposits of Rs 3 crore and above for SCBs (excluding RRBs) and SFBs. Further, it is also proposed to define the bulk deposit limit for Local Area Banks as Single Rupee term deposits of Rs 1 crore and above as applicable in case of RRBs. Necessary guidelines will be issued shortly, the central bank noted.

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