RBI FD Rules: Reserve Bank Changes Norms for Interest on Overdue Term Deposits
RBI's new FD rules are applicable to all commercial, small finance banks, local area banks, and co-operative banks.
The Reserve Bank of India (RBI) on Friday, 2 July, made an important announcement regarding the interest on the amount left unclaimed with the bank after a term deposit (TD)/Fixed Deposit (FD) matures.
According to the new rules, if a fixed deposit is matured, but the proceeds are unpaid and remains unclaimed with the bank, then the amount which is not claimed will attract the rate of interest that is applicable to savings account or the contracted rate of interest on the matured FD, depending on which one is lower.
Earlier, if a fixed deposit matured and the amount was unpaid, then the unclaimed amount with the bank used to attract rate of interest as applicable to savings deposits.
The official notification reads, "On a review of these instructions, it has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract rate of interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower."
The notice also mentions that the new rules are applicable to all scheduled commercial banks (including RRBs), small finance banks, local area banks, and all co-operative banks.
The decision to amend these rules has been taken because the unclaimed deposits with the bank have been increasing every year, reported Mint. The report further stated that the total amount of unclaimed deposit rose to around Rs 18,380 crore in FY19.
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