The Reserve Bank of India introduces new rules from October 1 requiring banks to apply uniform interest rates across branches for retail deposits, aiming to improve transparency and liquidity management amid evolving funding strategies.
The Reserve Bank of India will require banks to apply the same interest rate for deposits of the same amount accepted on the same day across all branches from October 1, a move designed to reduce inconsistencies in pricing and make retail deposit offers easier to compare. The central bank is also tightening disclosure rules, with lenders expected to publish retail deposit rate schedules in advance and place bulk deposit rates on their websites every business day.
According to the revised framework, banks will have more room to price bulk deposits differently when liquidity risk is higher, especially under the Liquidity Coverage Ratio regime. That approach extends to rupee deposits from non-residents and reflects the RBI’s effort to align deposit pricing more closely with funding stability rather than allowing branch-by-branch variation for ordinary savers.
The change does not force banks to raise or cut fixed deposit rates. Instead, it is aimed at improving transparency, consistency and liquidity management across the deposit market. Reuters-style reporting on the draft version of the rules noted that the RBI had already signalled its intention to link bulk deposit pricing more closely to liquidity characteristics and to tighten the timing of disclosures.
The policy lands against a backdrop of broader LCR changes that have already prompted lenders to rethink where they source funding. The Financial Express reported that banks have stepped up efforts to attract deposits from non-financial entities such as trusts, partnerships and limited liability partnerships after the RBI revised the treatment of some wholesale funding, cutting the run-off factor for “other legal entities” to 40% from 100%. In that context, the new deposit-rate rules appear intended to give banks flexibility where funding risk differs while preventing opaque pricing in the retail market.
Disclaimer: This article is intended to inform and educate, not to recommend or endorse any financial product, investment or strategy. Please consider your own financial circumstances and seek professional advice where appropriate before making financial decisions.
