RBI proposes revised deposit rate framework, tighter disclosure norms

RBI proposes new rules linking bulk deposit rates to liquidity norms and tighter disclosures, aiming to improve transparency in bank deposit pricing

The Reserve Bank of India (RBI) on Friday released draft directions on interest rates on deposits, proposing a revised framework that would allow banks to link the pricing of bulk deposits to their liquidity characteristics while strengthening disclosure requirements.

 

The draft directions have been placed in the public domain for feedback until July 7, 2026.

 

Under the proposed framework, banks will be permitted to offer differential interest rates on bulk term deposits based on factors such as deposit size, tenor and their treatment under the Liquidity Coverage Ratio (LCR) framework. The RBI said the changes are intended to align deposit pricing with the liquidity risk associated with such deposits.

   

Banks will be required to put in place a board-approved policy on interest rates on deposits and maintain records of bulk deposit rate cards in their core banking systems for supervisory review. The central bank has also proposed enhanced disclosure requirements, requiring banks to transparently publish the interest rates offered across deposit categories.

 

The draft directions consolidate existing instructions on deposit interest rates while incorporating changes arising from recent regulatory developments, including the revised LCR framework.

 

This follows a media report claiming that an internal probe by HDFC Bank, India's largest private sector lender, found that around ₹45 crore was paid to the state-run Maharashtra State Road Development Corporation (MSRDC) during FY24 and FY25 through marketing expenses classified as "differential interest".

 

On Friday, RBI Governor Sanjay Malhotra said differential interest rates on deposits offered by lenders to customers — beyond the variations permitted by the regulator based on factors such as deposit tenor and customer categories (for example, senior citizens) — are not acceptable.