RBI allows differential interest rate for term deposits above Rs. 15 lakh flows in, the banks might get a sigh of relief. It is reported that this facility would give the banks flexible-options for increasing their transactions and show profitability-reports in the long run.
There are certain restrictions also imposed by the R.B.I in this regard.
- Deposits up to Rupees-15-Lakhs should be given an option for premature-withdrawals, whether the bank-account is in individual-name or a Joint-account.
- For the term-deposits above rupees-15-lakhs, the banks can offer options to their customers. They can choose between premature-withdrawal and non-withdrawal options.
- The banks are supposed to submit a detailed report regarding the interest-rate-slabs, which they have fixed for the term-deposits to the R.B.I. This has to be done well in advance. However, the details about the intimation-period and other regulations have not been disclosed yet.
- The banks are expected to form a policy, approved by the board of directors in this regard, which will have to be clearly stated to the customers also. The policies should be transparent and available for R.B.I verification at any point of time.
- This dramatically changes the existing format where the banks are allowed to have flexible-interest-rates for term-deposits of 1-crore and above.