RBI allows banks to offer differential rates on bulk deposits under revised LCR framework

New Delhi, [India] July 31 (ANI): The Reserve Bank of India (RBI) has allowed banks to offer differential interest rates on bulk deposits based on their liquidity risk under the Liquidity Coverage Ratio (LCR) 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)

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