The Reserve Bank of India (RBI) has announced significant changes to the framework governing interest rates on bulk fixed deposits (FDs), which will come into effect from October 1, 2026. These revisions aim to bring greater transparency to the pricing of large deposits while still allowing banks some flexibility based on their liquidity management needs.
Daily Disclosure of Bulk FD Rates
Under the new guidelines, all commercial banks, small finance banks, regional rural banks, local area banks, payment banks, and urban cooperative banks will be required to publicly disclose their applicable bulk deposit rates. This disclosure must occur by 10:00 AM on every working day, with a 10-minute grace period allowing updates until 10:10 AM.
This means that the interest rates displayed on a bank's website will become the official reference point for all bulk deposits. For depositors, this change will offer clearer visibility into the rates available, enabling more informed decisions when considering a large FD.
Consistent Rates Across Branches
A key objective of the new rules is to prevent banks from offering disparate rates for similar bulk deposits simply because they are booked at different branches. Moving forward, banks must offer the same applicable rate across all their branches for bulk deposits of a similar amount accepted on the same day. This measure is designed to ensure consistency and fairness in the pricing of large deposits across a bank's network.
Flexibility Based on Liquidity Coverage Ratio (LCR)
While promoting consistency, the framework also grants banks a degree of flexibility. Banks can differentiate interest rates on bulk deposits based on the run-off rate applicable under the Liquidity Coverage Ratio (LCR) framework. The LCR framework assesses how different types of deposits and unsecured wholesale funding might leave a bank during periods of liquidity stress.
This provision allows banks to factor in the liquidity characteristics of various deposits when setting rates. Consequently, while similar deposits cannot be priced differently across branches without a valid reason, banks retain the ability to adjust rates where deposits have distinct liquidity treatments under the LCR framework. This flexibility also extends to certain rupee deposits held by non-resident Indians (NRIs).
Ultimately, for large depositors, the primary benefit of these changes will be enhanced transparency regarding available bulk FD rates. For banks, the revised framework balances daily disclosure and branch-level consistency with necessary flexibility for liquidity management.