The Reserve Bank of India (RBI) has said that banks can offer differential rates to depositors based on whether the deposits have premature withdrawal facility or not in addition to the difference in quantum and tenure of the deposits.
In a notice today, the central bank said that banks will have to compulsorily offer premature withdrawal for differential rate deposits of upto Rs 15 lakh and for deposits of above rs 15 lakh, the withdrawal facility can be optional.
“Banks should disclose in advance the schedule of interest rates payable on deposits i.e. all deposits mobilized by banks should be strictly in conformity with the published schedule,” the RBI said. Banks should also have a board approved policy for the same and ensure that the interest rates offered are reasonable, transparent and available for supervisory scrutiny.
In the sixth bi-monthly monetary policy review held in February, the central bank had decided to introduce the feature of early withdrawal in a term deposit as a distinguishing feature for offering differential rates of interest.
For Updates Check Banking and Finance News; follow us on Facebook and Twitter