The Reserve Bank of India (RBI) recently announced significant changes to fixed deposit rules, offering good news for depositors.
Starting now, all banks are required to allow early withdrawals on fixed deposits up to Rs 1 crore, a substantial increase from the previous limit of Rs 15 lakh.
RBI’s New Regulations
The RBI issued a circular stating that, following a review, the minimum amount for non-withdrawable fixed deposits has been raised to Rs 1 crore.
This change ensures that individuals can access premature withdrawal options for fixed deposits up to Rs 1 crore or less.
Additionally, banks now have the flexibility to offer varying interest rates based on the deposit’s duration and size, in accordance with existing guidelines.
However, this does not apply to fixed deposits with no premature withdrawal option.
These new instructions are effective immediately for all commercial and cooperative banks.
Instructions for Banks and Credit Bureaus
In another circular, the RBI announced an increase in the ‘bulk deposit’ limit for Regional Rural Banks (RRBs) from the previous Rs 15 lakh to Rs 1 crore and above.
Furthermore, the RBI stipulated that Credit Information Companies (CIC) will be subject to a daily compensation of Rs 100 for any delay in rectifying customers’ credit information.
Credit institutions (CI) and credit information companies (CIC) have been granted a six-month grace period to implement these new regulations.
