The Reserve Bank of India (RBI) has revised the regulatory framework governing interest rates on commercial bank deposits by permitting banks to offer differential interest rates on bulk deposits based on liquidity risk under the Liquidity Coverage Ratio (LCR) framework.
The revised framework will come into force from October 1, 2026. Under the updated directions, banks may determine different interest rates for eligible bulk deposits by considering the applicable run-off rates assigned to deposits or unsecured wholesale funding under the Reserve Bank of India (Commercial Banks – Asset Liability Management) Directions, 2025. The provision applies to both domestic rupee deposits and rupee deposits accepted from non-residents.
While introducing greater flexibility in deposit pricing, the RBI has retained the requirement of fair and consistent treatment for similarly placed depositors. Banks must continue to offer identical interest rates for deposits of the same amount accepted on the same date, irrespective of the branch, ensuring that no discrimination occurs between comparable depositors.
To strengthen transparency in deposit pricing, the central bank has also introduced enhanced disclosure requirements. Banks will be required to publish their applicable deposit interest rate schedule, including bulk deposit rates, on their official websites. Bulk deposit rates must be updated daily at 10:00 a.m., with a permissible grace period until 10:10 a.m. on every business day.
According to the RBI, these amendments follow a review of the existing deposit interest rate framework and are intended to align deposit pricing practices with the revised LCR regulations while improving transparency and consistency across the banking system. CA Sansaar