Now Reading: RBI bans secret deals on bulk deposit rates from October 1
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RBI bans secret deals on bulk deposit rates from October 1
The Reserve Bank of India has ordered banks to publish bulk deposit rates daily and offer identical terms to every depositor placing the same amount on the same date, ending the practice…
The Reserve Bank of India has ordered banks to publish bulk deposit rates daily and offer identical terms to every depositor placing the same amount on the same date, ending the practice of negotiated private deals. The rules, notified on July 30, 2026, take effect from October 1, 2026, and cover commercial banks, small finance banks, regional rural banks, payment banks, local area banks and urban co-operative banks.
Bulk deposits are single fixed deposits of Rs 3 crore or more, typically placed by corporate treasuries, large businesses, trusts and high net worth individuals. Under the new directions, commercial banks must post their bulk deposit rates on their websites by 10:00 am each business day, and the rate actually offered must match the published figure. Banks must also charge the same rate for deposits of an identical amount placed on the same date, regardless of the customer.
The only flexibility introduced concerns the Liquidity Coverage Ratio framework: banks may now offer higher rates on deposits considered more volatile, allowing pricing to better reflect liquidity risk. The RBI stated the changes are aimed at enhancing transparency and accurate pricing of liquidity risk.
Indian Opinion Analysis
The move closes a long-standing gap in Indian banking regulation. Bulk deposit pricing was never subject to the same transparency rules as retail deposits, allowing relationship-based discounts that distorted competition. Under the Banking Regulation Act, 1949, the RBI has the power to prescribe interest rate directions, and this amendment brings corporate deposit pricing closer to the public disclosure norms that apply to lending rates. The daily rate publication also gives the RBI itself a verifiable benchmark for supervisory checks. The real test will be enforcement: how strictly the RBI monitors compliance and whether penalties for violations are set high enough to deter off-book deals. The first compliance report from banks will be due in October 2026.
Source: news.abplive.com
This brief was synthesised by AI from the source linked above.
