RBI Raises Threshold for Bulk Deposits, Earning Higher Interest Photo : PTIReserve Bank on India in its second bi-monthly monetary policy for the current financial year hiked the threshold for bulk fixed deposits to Rs 3 crore from existing Rs 2 crore.
Bulk fixed deposits earn slightly higher interest rate than retail term deposits as banks offer different rates as part of their liquidity management exercise.
Now single rupee term deposits of up to Rs 2 crore with Scheduled Commercial Banks (excluding Regional Rural Banks) and Small Finance Banks will be part of retail fixed deposits.
Additionally, as is the case with RRBs, it is planned to establish the bulk deposit limit for Local Area Banks as Single Rupee term deposits of Rs 1 crore and beyond.
"This will further promote ease of doing business and provide greater operational flexibility to authorized dealer banks.
Good News for FD Depositors! RBI Raises Threshold for Bulk Deposits, Earning Higher Interest Photo : PTI
Reserve Bank on India in its second bi-monthly monetary policy for the current financial year hiked the threshold for bulk fixed deposits to Rs 3 crore from existing Rs 2 crore. Bulk fixed deposits earn slightly higher interest rate than retail term deposits as banks offer different rates as part of their liquidity management exercise.
Now single rupee term deposits of up to Rs 2 crore with Scheduled Commercial Banks (excluding Regional Rural Banks) and Small Finance Banks will be part of retail fixed deposits. On a review of the bulk deposit limit, it is proposed to revise the definition of bulk deposits as 'Single Rupee term deposit of Rs 3 crore and above' for SCBs (excluding RRBs) and SFBs, RBI Governor Shaktikanta Das said while announcing the bi-monthly policy on Friday.
Additionally, as is the case with RRBs, it is planned to establish the bulk deposit limit for Local Area Banks as Single Rupee term deposits of Rs 1 crore and beyond. The RBI has suggested streamlining export and import regulations for products and services under the Foreign Exchange Management Act (FEMA), 1999, in order to facilitate business dealings. The current FEMA guidelines on the export and import of goods and services are suggested to be rationalized in light of the evolving dynamics of international trade and in accordance with the progressive liberalization of foreign exchange laws, according to Das.
"This will further promote ease of doing business and provide greater operational flexibility to authorized dealer banks. Draft guidelines will be issued shortly for stakeholder feedback," he said.
(PTI Inputs)
