RBI revises FD rules for small finance banks from October
What's the story
The Reserve Bank of India (RBI) has announced new guidelines for small finance banks (SFBs) on fixed deposit (FD) interest rates and related matters. The changes were announced under the 'Reserve Bank of India (Small Finance Banks - Interest Rate on Deposits) Second Amendment Directions, 2026,' and will come into effect from October 1. The new rules are aimed at bringing more clarity, transparency, consistency, and fairness for depositors investing in FDs offered by leading SFBs across the country.
Rule change
Advance disclosure of deposit interest rates
Under the revised framework, SFBs will have to disclose their deposit interest rate schedules in advance.
The interest on normal and bulk deposits should be as per the rates published on the bank's website.
This move is expected to help customers easily compare FD rates across different banks, promoting transparency in the banking sector.
Rate adjustments
Daily updates for bulk deposits
For bulk deposits, SFBs will have to update the applicable interest rates on their websites every business day at 10:00am.
A grace period of 10 minutes will be given, allowing updates until 10:10am.
A bulk deposit is a single rupee term deposit of ₹3 crore or more for scheduled commercial banks and SFBs.
This rule ensures timely information on interest rates for large investors in the banking sector.
Rate uniformity
Uniformity across branches and customers
The RBI has made it clear that deposit interest rates should be uniform across all branches and customers.
Banks cannot offer different rates for deposits of the same amount accepted on the same date.
This rule ensures equal treatment for depositors, irrespective of their branch or customer profile where they open their FD.
It is a major step toward promoting fairness in banking practices.
Rate differentiation
Flexibility in bulk deposits
While uniformity will apply to normal deposits, SFBs can offer different interest rates on bulk deposits.
These rules must be clarified in advance and the difference can be based on factors like deposit stability and liquidity requirements under the RBI's regulatory framework.
This flexibility also applies to bulk deposits received from non-resident customers, allowing banks to manage their funds effectively.