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TMI BlogMaster Direction - Reserve Bank of India (Interest Rate on Deposits) Directions, 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... foreign branches of Indian banks. 3. Definitions (a) In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: (i) Bulk Deposit means : Single Rupee term deposits of Rupees one crore and above for Scheduled Commercial Banks other than Regional Rural banks Single Rupee term deposits of Rupees fifteen lakhs and above for RRBs. (ii) Composite Cash Credit means a type of loan product having a cash credit limit with a fully savings module designed to take care of farmer s interest. (iii) Current Account means a form of non-interest bearing demand deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount. and shall also be deemed to include other deposit accounts which are neither Savings Deposit nor Term Deposit; (iv) Daily product means the interest applied on the end of day balance. (v) Demand deposit means a deposit received by the bank, which is withdrawable on demand; (vi) Domestic Rupee Deposits mean rupee deposits maintained in India in the form of current account, savings deposits or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l have the same meaning as have been assigned to them under the Banking Regulation Act or the Reserve Bank of India Act, or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be. CHAPTER II GENERAL GUIDELINES 4. Interest Rate framework Scheduled commercial banks shall pay interest on deposits of money (other than current account deposits) accepted by them or renewed by them in their Domestic, Ordinary Non-Resident (NRO), Non-Resident (External) Accounts (NRE) and Foreign Currency (Non-resident) Accounts (Banks) Scheme {FCNR(B)} deposit account on the terms and conditions specified in these directions: (a) There shall be a comprehensive policy on interest rates on deposits duly approved by the Board of Directors or any committee of the Board to which powers have been delegated. (b) The rates shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices. (c) Interest rates payable on deposits shall be strictly as per the schedule ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) Interest on domestic rupee savings deposits shall be calculated on a daily product basis as under: A uniform interest rate shall be set on balance up to Rupees one lakh, irrespective of the amount in the account within this limit. Differential rates of interest may be provided for any end-of-day savings bank balance exceeding Rupees one lakh. 7. Interest Rates on domestic Term Deposits (a) In addition to the conditions laid down in section 4 of these Directions, interest rates on term deposits shall vary only on account of one or more of the following reasons: (i) Tenor of Deposits: Banks shall have the freedom to determine the maturity/tenor of the deposit subject to the condition that minimum tenor of the deposit offered shall be seven days. (ii) Size of Deposits Differential interest rate shall be offered only on bulk deposits. Provided that differential interest shall not be applicable on deposit schemes framed on the basis of the Bank Term Deposit Scheme, 2006 or the deposits received under the Capital Gains Accounts Scheme, 1988. (iii) Non- availability of Premature withdrawal option Banks shall have the freedom to offer term de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the monies deposited or which may be deposited from time to time into such account belong to the depositor: member or a retired member of the bank s staff, either singly or jointly with any member or members of his/her family; or the spouse of a deceased member or a deceased retired member of the bank s staff; and an Association or a fund, members of which are members of the bank s staff; (b) Scheduled Commercial Banks shall, at their discretion, formulate term deposit schemes specifically for resident Indian senior citizens, offering higher and fixed rates of interest as compared to normal deposits of any size. Provided that this facility is not offered on the term deposit standing in the name of an HUF or the Karta of the Hindu Undivided Family (HUF), even if the Karta is a resident Indian senior citizen. (c) Scheduled Commercial Banks shall, at their discretion, give their resident Indian retired staffs, who are senior citizens, the benefit of additional interest rates as admissible to senior citizens over and above the additional interest payable to them by virtue of their being retired members of the banks staff. 9. Interest on overdue domes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f this direction desires premature withdrawal of deposit consequent to the transfer of business to another bank. CHAPTER IV RUPEE DEPOSITS OF NON-RESIDENTS 15. Interest rates on Rupee Deposits-Non-Residents Interest on deposits of money accepted or renewed under NRE/NRO deposit scheme shall be on the terms and conditions specified in the ensuing paragraphs: (a) The interest rates shall be subject to the conditions laid down in section 4 of these Directions. (b) Interest rates on savings deposits under Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits shall be in accordance with section 6 of these Directions. (c) Interest rates on NRE/NRO term deposits shall vary only on account of one or more of the following reasons: (i) Tenor of Deposits: Banks shall have the freedom to determine the maturity/tenor of the deposit subject to the condition that minimum tenor of NRE term deposits shall be one year and that of NRO term deposits shall be seven days. (ii) Size of Deposits Differential interest rate shall be offered only on bulk deposits (d) Interest rates on NRE/ NRO deposits shall not be higher than those offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Scheme shall be in accordance with the terms and conditions specified in the ensuing paragraphs: (a) The interest rates shall be subject to the conditions laid down in section 4 of these Directions. (b) Interest rates on term deposits under the FCNR (B) scheme shall vary only on account of one or more of the following reasons: (i) Tenor of deposits The maturity period for term deposits under the FCNR (B) scheme shall be as under: One year and above but less than two years Two years and above but less than three years Three years and above but less than four years Four years and above but less than five years Five years only Provided that, no bank shall accept or renew FCNR (B) deposits over five years and no recurring deposits shall be accepted under the FCNR (B) Scheme. (ii) Size of deposits Scheduled Commercial Banks shall, at their discretion, decide the currency-wise minimum quantum on which differential rates of interest may be offered. (c) The interest rates on all deposits, including where differential rates of interest are offered, shall be subject to the overall ceiling prescribed at 19 (g) below. (d) Interest on floating ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . period beyond the original date of maturity. 22. Interest payable on the deposit of a deceased FCNR(B) depositor Scheduled commercial banks shall pay interest on the term deposits standing in the name(s) of a deceased FCNR(B) individual depositor or two or more joint depositors where one of the depositors has died, as under:- If paid on the maturity of the deposit, interest shall be paid at the contracted rate; If the deposit is claimed before the maturity date, interest shall be paid not at the contracted rate but at the rate applicable to the period for which the deposit remained with the bank and without charging penalty for pre-payment; In case the depositor dies before the date of maturity of the deposit but the amount of the deposit is claimed after the date of maturity, interest shall be paid at the contracted rate till the date of maturity and simple interest at the applicable rate operative on the date of maturity for the period for which the deposit remained with the bank beyond the date of maturity. In case of death of the depositor after the date of maturity of the deposit, the interest rate operative on the date of maturity in respect of savi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owers have been delegated, subject to the following: (a) The components of penalty shall be clearly brought to the notice of the depositors at the time of acceptance of the deposits. If not, the exchange loss arising out of premature withdrawal shall be borne by the Scheduled Commercial Banks. (b) Penalty shall be levied on premature withdrawal of FCNR(B) deposits when the depositors return to India for permanent settlement. for conversion of FCNR (B) deposits into NRE deposits or vice-versa. (c) In case of splitting of the amount of term deposit at the request from the claimant/s, no penalty for premature withdrawal of the term deposit shall be levied if the period and aggregate amount of the deposit do not undergo any change. (d) Scheduled Commercial Banks shall, at their discretion, levy penalty to recover the swap cost in the case of premature withdrawal of FCNR(B) deposits. (e) No penalties shall be levied in the case of premature conversion of balances held in FCNR (B) deposits into RFC Accounts by Non-Resident Indians on their return to India. (f) No penalty for premature withdrawal shall be levied, where depositors of the branch as mentioned in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent/s of private financiers or giving of an authority by power of attorney, nomination or other-wise, for such clients receiving such deposits on maturity. (g) Grant advances against term deposits maintained with other banks. (h) Open a savings deposit account in the name of entities other than individuals, Karta of HUF and organisations/agencies listed in Schedule -I. (i) Create any fund to be utilized for charitable purposes in consultation with the depositors. 29. Exemptions The provisions in the above paragraphs shall not be applicable to: (a) A deposit received by the bank: from the institutions permitted to participate in the Call/Notice/Term Money Market both as lenders and borrowers. for which it has issued a participation certificate; under the Capital Gains Accounts Scheme, 1988, framed by the Government of India in pursuance of sub-section (2) of Section 54 , sub-section (2) of Section 54B , sub-section (2) of Section 54D , sub-section (4) of Section 54F and sub-section (2) of Section 54G of the Income-Tax Act, 1961 ; and under the Certificate of Deposit Scheme. (b) Payment of interest on delayed collection of outstation in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 01 4.11.2000* Master Directive on Interest Rates on Rupee Deposits held in Domestic, Ordinary Non-Resident (NRO), Non-Resident Special Rupee (NRSR) and Non-Resident (External) (NRE) Accounts 2 DBOD. No.FSC.BC.61/24.91.001/2000 29.12.2000 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - Private Sector Mutual Funds 3 DBOD.No.Dir.BC.62/13.03.00/2000-01 03.01.2001 Interest Rates on Deposits 4 DBOD.No.Dir.BC.64/13.03.00/2000-01 03.01.2001 Payment of Interest on the Term Deposit of a Deceased Depositor 5 DBOD. No.FSC.BC.80/24.103.001/2000 20.02.2001 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - Insurance Companies 6 DBOD. No.FSC.BC.85/24.103.001/2001 01.03.2001 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Credit Policy for the year 2002-03 - Interest Rates on Deposits by Banks/RRBs/Local Area Banks 18 DBOD.No.FSC.BC.45/24.92.001/2002-03 03.12.2002 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscounting Scheme - Primary Dealers 19 DBOD.No.Dir.BC.50 51/13.03.00/2002-03 14.12.2002 Opening of Saving Bank Accounts in the Name of certain Bodies/Organizations 20 DBOD.No.Dir.BC.75 76/13.03.00/2002-03 28.02.2003 Interest Rates on Deposits 21 DBOD.No.FSC.BC.85 86/24.91.001/2002-03 26.03.2003 Permission to Participate in Call/Notice/Term Money Market and Bills Rediscounting Scheme - Primary Dealers 22 DBOD.No.FSC.BC.86/24.92.001/2002-03 26.03.2003 Permission to Participate in Call/Notice Money Market and Bills Rediscounting Scheme - Private Sector Mutual Funds 23 DBOD.No.Dir.BC.101 102/13.01. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Banking Services - Use of Business Facilitators and Correspondents 35 DBOD No. Dir. 62/13.03.00/2005-06 08.02.2006 Interest Rates on Non-Resident Deposits 36 DBOD No. Dir. 80/13.03.00/2005-06 18.04.2006 Interest Rate on Non-Resident (External) Rupee (NRE) Deposits 37 DBOD.No.Dir.BC.54 55/13.03.00/2006-07 31.01.2007 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) deposits 38 DBOD.No.Dir.BC.70/13. 01.01/2006-07 30.03.2007 Rounding off cheques to the nearest rupee 39 DBOD.No.Dir.BC.88 89/13.03.00/2006-07 24.04.2007 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) deposits 40 DBOD No.Dir.BC.39/13.03.00/2007-08 25.10.2007 Deposit schemes with lock-in period 41 DBOD.No.Leg.BC.47/09.07.005/2008- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Interest Rates on and Premature Withdrawal of Rupee Term Deposits 55 Mail Box Clarification 03.04.2013 Issue of Term Deposit Receipt 56 DBOD.Dir.BC.40/13.03.00/2013-14 14.08.2013 Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits 57 DBOD.No.Dir.BC.69/13.03.00/2013-14 29.11.2013 Periodicity of Payment of Interest on Rupee Savings/ Term Deposits 58 DBOD.No.Dir.BC.71/13.03.00/2013-14 29.11.2013 Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits 59 DBOD.No.Dir.BC.90/13.03.00/2013-14 31.01.2014 Deregulation of Interest Rates on Non-Resident (External) Rupee (NRE) Deposits 60 DBR.No.Dir.BC.87/13.03.00/2014-15 16.04.2015 Interest Rates on Deposits 61 DBR.Dir.BC.No.33/13.03.00/2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... FCNR(B) Deposits 12 Mailbox clarification 4.10.2006 Rounding Off the Interest Rates on Domestic, NRE and FCNR(B) Deposits 13 DBOD.No.Dir.BC.55/13.03.00/2006-07 31.01.2007 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits 14 DBOD.No.Dir.BC.44/13.03.00/2008-09 16.09.2008 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits 15 DBOD.No.Dir.BC.64/13.03.00/2008-09 15.10.2008 Interest Rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR (B) Deposits 16 DBOD.No.Dir.BC.58 59/13.03.00/2011-12 23.11.2011 Interest rates on Non-Resident (External) Rupee (NRE) Deposits and FCNR(B) Deposits 17 DBOD.No.Dir.BC.101 102/13.03.00/2011-12 04.05.2012 Interest Rates on FCNR(B) Deposits 18 DBOD ..... X X X X Extracts X X X X X X X X Extracts X X X X
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