RBI gives diktat to banks on bulk deposit rate disclosures

The revised guidelines give lenders flexibility to set varied interest rates on bulk deposits
| Photo Credit:
ROY CHOWDHURY A

Banks are expected to wait until the last permitted moment before updating their websites with the interest rates payable on bulk deposits for each business day, so that competitors do not gain an early advantage once the new rules come into force on October 1.

Concerned that displaying bulk deposit rates exactly at 10 am could allow rival lenders to respond quickly, banks are likely to use the 10-minute window available after the RBI deadline and publish their rates by 10.10 am.

Bankers say that if one lender reveals its full rate card at 10 am, competitors can immediately offer 5-10 basis points more and attract prospective bulk depositors.

As per the Reserve Bank of India (Commercial Banks – Interest Rate on Deposits) Second Amendment Directions, 2026, interest rates payable on deposits, including bulk deposits, must strictly follow the schedule of rates disclosed in advance on the bank’s website.

Room until 10.10 am

However, the guidelines require banks to disclose interest rates on bulk deposits on their websites at 10:00 am on every business day, with a relaxation of 10 minutes, meaning the rates must be posted no later than 10:10 am.

“While this is a positive step and may prevent bulk depositors from pitting one bank against another to secure better returns, the grace period may not be necessary. Most banks are likely to wait until the last minute, 10.10 am, before uploading details of their bulk deposit rates,” said a senior executive with a private sector bank.

The bulk deposit rates from the previous day, along with prevailing liquidity conditions and credit demand, will act as key indicators for banks while deciding the next day’s rates, he added.

More flexibility for lenders

The revised norms give banks the freedom to offer different interest rates on bulk deposits by factoring in the applicable run-off rates for deposits or unsecured wholesale funding under the LCR (liquidity coverage ratio) framework.

Under the LCR framework, banks are required to maintain sufficient high-quality liquid assets, equal to 100 per cent of their total net cash outflows, to withstand a 30-day stress scenario. The run-off rate refers to the portion of deposits that may be withdrawn during such a period.

Therefore, funds from non-financial entities such as educational, religious or charitable trusts, Association of Persons (AoPs), partnerships, proprietorships, Limited Liability Partnerships and other incorporated bodies will be treated as funding from ‘non-financial corporates’ and attract a run-off rate of 40 per cent.

Funding from corporates, along with deposits from banks, insurance companies, financial institutions and entities engaged in financial services, will attract a run-off rate of 100 per cent.

As a result, banks can offer higher interest rates on bulk deposits from non-financial entities, since these deposits carry a lower run-off rate compared with funds mobilised through the other categories.

Published on September 21, 2026