City
Epaper

RBI hikes limit of bulk deposits for banks, FD investors to gain

By IANS | Updated: June 7, 2024 11:35 IST

Mumbai, June 7 The Reserve Bank of India (RBI) has decided to revise the definition of bulk deposits ...

Open in App

Mumbai, June 7 The Reserve Bank of India (RBI) has decided to revise the definition of bulk deposits as ‘Single Rupee term deposits of Rs 3 crore and above’ for scheduled commercial banks and small finance banks, central bank Governor Shaktikanta Das said on Friday.

Banks have the discretion to offer differential rates of interest on bulk deposits as per their requirements and Asset-Liability Management (ALM) projections.

The bulk deposits limit was enhanced in 2019 for Scheduled Commercial Banks and Small Finance Banks as ‘Single Rupee term deposits of Rs 2 crore and above’. This limit has now been raised after taking a review, the RBI Governor said.

The necessary guidelines for implementing the measure will be issued shortly, he added.

Das said it is also proposed to define the bulk deposit limit for Local Area Banks as ‘Single Rupee term deposits of Rs 1 crore and above’ as applicable in case of RRBs.

A bank FD of Rs 2 crore and above is considered a bulk FD currently.

This would mean that an individual making bank FD between Rs 2 crore and up to Rs 3 crore will soon be considered as retail FD instead of bulk FD.

Banks usually offer lower FD rates on bulk FDs as compared to retail FDs. After the decision to raise the limit on bulk deposits, FD investors are likely to earn higher interest rates. Banks tend to offer higher interest rates on bulk FDs on specific tenures depending on the liquidity conditions in the debt market.

This limit, however, will not apply to regional rural banks which have a separate limit.

Disclaimer: This post has been auto-published from an agency feed without any modifications to the text and has not been reviewed by an editor

Open in App

Related Stories

International"High Stakes!": US President Trump, ahead of the Alaska Summit

EntertainmentTeaser of Nivin Pauly, Nayanthara's 'Dear Students' promises a laugh riot!

Other SportsPM Modi highlights 'Khelo Bharat Neeti' for strengthening sports ecosystem at all levels

NationalBihar govt to spend Rs 35.64 crore on interstate bus services for migrant workers

EntertainmentI Also Love Dogs But...: Rahul Vaidya Backs Court’s Ruling on Stray Dogs, Recalls Personal Dog Bite Incident

Business Realted Stories

BusinessIndia’s forex reserves surge by $4.75 bn to scale $693.6 bn mark

BusinessCentre sends proposal for two tax rates across all goods to GST Council

BusinessFuture is being built in India: Industry reacts to PM Modi’s chip dream

BusinessCentre proposes scrapping 12% and 28% in GST structure, most items to move to 5%, 18% rates: Government sources

BusinessIndia hosts 10th AITIGA review meeting in New Delhi