RBI allows banks to offer differential rates on bulk deposits under revised LCR framework
New Delhi, July 31
The Reserve Bank of India has allowed banks to offer differential interest rates on bulk deposits based on their liquidity risk under the Liquidity Coverage Ratio framework, while tightening disclosure norms to improve transparency in deposit pricing.
The changes will come into effect from October 1, 2026 as notified by the Central bank.
The move aligns deposit pricing with the revised LCR framework, enabling banks to differentiate interest rates on bulk deposits depending on the applicable run-off rates assigned to such deposits.
The RBI said, "A bank shall have the freedom to offer differential interest rate on bulk deposits, by considering the differential run-off rate applicable to deposits or unsecured wholesale funding under the LCR framework, as specified in the 'Reserve Bank of India (Commercial Banks - Asset Liability Management) Directions, 2025'." The provision has been introduced for both domestic rupee deposits and rupee deposits of non-residents.
The central bank has, however, retained the principle of non-discrimination for similarly placed depositors. It stated, "The interest rates offered on deposits, including bulk deposits, shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another deposit of similar amount, accepted on the same date, at any of its offices."
In another significant change aimed at enhancing transparency, the RBI has mandated daily public disclosure of bulk deposit rates.
According to the amended directions, "Interest rates payable on deposits, including bulk deposits, shall be strictly as per the schedule of interest rates disclosed in advance on the bank's website. However, interest rates payable on bulk deposits shall be disclosed on the bank's website at 10:00 am with a grace time of 10 minutes, latest by 10:10 am, on each business day."
The RBI said the revised instructions were issued following a review of the existing deposit interest rate framework. The amendments modify the RBI's 2025 directions governing interest rates on commercial bank deposits and will be effective from October 1, 2026.
— ANI
Reader Comments
As someone who manages our family investments, I'm relieved they've kept the non-discrimination clause for same-day deposits. Otherwise, banks could have played favorites. But the 10:10 AM deadline for daily disclosure is very strict—hope smaller banks can handle the tech burden. Transparency is always welcome though! 📊
This is classic RBI forward-thinking. By linking deposit rates to run-off risk, they're preparing banks for the Basel III norms. But I'm cautious—will this lead to a rate war between banks for short-term deposits? The disclosure requirements are good but let's see if they actually protect the common saver or just make it easier for big players to hoard liquidity.
Wait, so banks can now charge me more for withdrawing my money early because it's "risky" for them? That feels like punishing the small fish. We already got hit with penalty charges. I hope RBI keeps an eye on how these differential rates actually get implemented. Otherwise, this is just a way to squeeze more money from ordinary depositors.
Finally, a modernization of our deposit system! I've always wondered why a 5-crore deposit gets the same treatment as a 5-lakh one. This will make our banking system more resilient. Also, the daily disclosure at 10 AM is a nice touch—it'll curb malpractices and make rates more predictable for corporate treasurers like me. 👍
From a foreign investor's perspective, this is a step toward aligning Indian banking with global market practices. The LCR framework is standard in Basel norms, and differentiating
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