New Delhi: Banks will treat deposits of over ₹2 crore as ‘bulk’ after the Reserve Bank of India (RBI) today doubled the limit for the same from the earlier ₹1 crore. This would enhance operational freedom of banks, the RBI said in a release. Commercial banks normally offer a lower rate of interest on bulk deposits.
According to current RBI rules, last reviewed in January 2013, banks have the option of not permitting premature withdrawals of ‘large rupee term deposits’ of ₹1 crore and above.
Banks can offer different rates of interest only on bulk deposits of ₹1 crore and more for the same maturity period. They can’t adopt this practice for term deposits of less than ₹1 crore where the interest rate is fixed for a given maturity, irrespective of the amount deposited.
None of this can be a result of any agreement between the bank and the customer. Banks have to disclose in advance the schedule of interest rates payable on deposits, including deposits on which differential interest will be paid.