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RBI Master Direction on Deposit Interest Rates: Key Rules

2 April 20251 min read
BANKING & FINANCERBI MasterDirection onDeposit InterestRates: Key Rules2 April 2025safalsetu.com

Why in the news

RBI released a comprehensive Master Direction (MD) on deposit interest rates for commercial banks, applicable immediately.

Key facts

  • Uniform rates across branches and customer categories; no discrimination for identical amount, tenure and date.
  • Rates are not negotiable with individual depositors.
  • The rate policy needs board of directors (or authorised committee) approval and must be open to RBI scrutiny.
  • Domestic rupee savings deposits earn interest on a daily product basis.

Significance

  • Transparency, equal treatment and stronger consumer protection.
  • Banks must keep detailed policy records for review.

Exam angle

  • Regulator: RBI; method for savings: daily product basis.

Test yourself

1. Under RBI's Master Direction on deposit rates, savings deposit interest is calculated on which basis?

Domestic rupee savings deposit interest moves to a daily product basis.

2. Who must approve a bank's deposit interest rate policy under the new Master Direction?

The policy needs board or authorised committee approval.

3. What does the Master Direction say about negotiating deposit rates with individual depositors?

Deposit rates cannot be negotiated between banks and individual depositors.

This topic is part of Daily Current Affairs 2 April 2025 (21 topics).

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