Banks can offer differential rates on term deposits

Banks can offer differential rates on term deposits: RBI

According to an RBI note: Term deposits of Rs 15 lakh and below must have premature withdrawal facility. For deposits above Rs 15 lakh, banks may or may not offer premature withdrawal.

The Reserve Bank of India has allowed banks to offer differential interest rates on term deposits. According to an RBI note: Term deposits of Rs 15 lakh and below must have premature withdrawal facility. For deposits above Rs 15 lakh, banks may or may not offer premature withdrawal. RBI also says banks must disclose schedule of rates payable on term deposits in advance. “Banks can use differential interest rates linked to withdrawal facilities,” the note says. RBI adds that banks must have a board approved policy with respect to interest rates on deposits.

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Source : Moneycontrol.com