Reserve Bank of India allows premature deposit withdrawal up to Rs 1 crore
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The Reserve Bank of India (RBI) has increased the threshold limit of non-callable deposits to Rs 1 crore from Rs 15 lakh now, a move that would provide more flexibility to depositors.
These new norms for commercial and co-operative banks are applicable with immediate effect.
“During a review, it has been decided that the minimum amount for offering non-callable term deposits may be increased from Rs 15 lakh to Rs 1 crore. This means all domestic term deposits accepted from individuals for an amount of Rs 1 crore and below will have premature withdrawal facility,” the RBI said.
Banks typically offer higher interest rates on non-callable deposits. The callability feature is applicable for non-resident (external) rupee deposits/ordinary non-resident deposits.
Banks are allowed to offer differential rates on interest on fixed deposits based on non-callability of deposits (i.e., non-availability of premature withdrawal option) in addition to tenor and size of deposits, the RBI said.
In 2019, the RBI re-defined bulk deposits as deposits of more than Rs 2 crore from a single customer, which was Rs 1 crore earlier.
According to bankers, the move to increase the threshold for callable deposits was to align it with bulk deposits definition change.
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