RBI New Update: Whenever the topic of investment arises, Fixed Deposits (FDs) often come to mind. If you are planning to invest in an FD, it is essential to be aware of this new update from the RBI. The RBI is set to modify the structure governing interest rates on fixed deposits, with new regulations coming into effect on October 1, 2026. This move aims to enhance transparency. Let us explore the details.
Why did the RBI make this decision?
The central bank intends to provide banks with greater flexibility regarding their liquidity requirements, which is the reason for this change. Let us examine the specific changes that the RBI is introducing and their potential impact.
Major disclosure regarding bulk FDs
Under the new RBI regulations, banks will be required to disclose details of applicable bulk FDs by 10:00 AM at the end of each week. Banks will be allowed a 10-minute window to update their interest rates. Furthermore, when paying interest on deposits—including large-value deposits—banks must adhere to the rates displayed on their websites.
What is a bulk FD?
This move by the RBI is expected to foster depositor trust and increase transparency. A ‘bulk deposit’ is a fixed deposit of more than ₹3 crore. Interest rates offered on such deposits may differ from those offered on regular deposits.
Uniform FD interest rates across bank branches
Another significant change has been introduced under the new RBI rules. This measure aims to prevent the practice of offering varying interest rates for the same deposit amount. Banks often set different interest rates across their various branches; this practice will now be addressed. Banks will now be required to offer a uniform rate at their branches for large-value deposits of the same amount accepted on the same day.
Different interest rates are applicable in these circumstances.
However, this structure allows banks to differentiate rates under certain conditions related to liquidity requirements. Banks may offer varying interest rates on wholesale deposits based on the applicable withdrawal rates under the Liquidity Coverage Ratio framework.