The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Interest Rate on Deposits) Second Amendment Directions, 2026, vide circular RBI/2026-27/214 dated July 30, 2026. The amendments revise the regulatory framework governing interest rates on rupee bulk deposits and introduce greater transparency in the disclosure of deposit rates.
1. Effective Date
The amended provisions will come into force with effect from October 1, 2026. Banks therefore have a limited implementation window to review their deposit-rate policies, website disclosures, operational processes and systems.
2. Advance Disclosure of Deposit Interest Rates
A significant amendment relates to the manner in which deposit interest rates are disclosed.
Interest rates payable on deposits, including bulk deposits, must strictly correspond with the schedule of interest rates disclosed in advance on the bank's website. In the case of bulk deposits, the applicable rates must be disclosed on the website at 10:00 a.m. on each business day, with a grace period of 10 minutes, i.e. disclosure must be completed by 10:10 a.m.
Regulatory significance:
This introduces a much more precise and time-bound disclosure obligation for bulk deposit rates. Banks will need to ensure that the website reflects the applicable rates within the stipulated daily window and that there is appropriate internal control over any changes to rates.
3. Uniformity and Non-Discrimination
The amended provision requires interest rates offered on deposits, including bulk deposits, to be uniform across all branches and for all customers. It further prohibits discrimination in interest paid between deposits of similar amounts accepted on the same date at any office of the bank.
This provision strengthens the principles of transparency, consistency and non-discriminatory treatment of depositors.
From an operational perspective, banks should ensure that branch-level discretion does not result in rates that differ from the rates officially disclosed and applicable to similarly situated deposits.
4. Differential Rates for Bulk Deposits Based on LCR Run-Off Rates
An important new flexibility has been introduced in relation to bulk deposits.
Banks are permitted to offer differential interest rates on bulk deposits by taking into account the differential run-off rates applicable to deposits or unsecured wholesale funding under the Liquidity Coverage Ratio (LCR) framework. The relevant LCR provisions are contained in the RBI's Commercial Banks – Asset Liability Management Directions, 2025.
This provision is particularly significant because it creates a regulatory linkage between deposit pricing and liquidity characteristics.
In other words, banks can take into consideration the liquidity impact of particular categories of bulk deposits when determining the interest rate offered. This gives banks greater flexibility to price deposits in accordance with their liquidity-risk profile.
5. Extension to Non-Resident Rupee Deposits
The same flexibility concerning LCR-related differential run-off rates has also been extended to rupee deposits of non-residents.
The amended framework permits differential interest rates on bulk deposits by considering the applicable differential run-off rates under the LCR framework.
Thus, the amendment is not confined to domestic rupee deposits; its implications also extend to the pricing of relevant non-resident rupee deposits.
Key Regulatory Implications
| Area | Impact of Amendment |
|---|---|
| Deposit rate disclosure | Rates must be disclosed in advance on the bank's website |
| Bulk deposit rates | Daily disclosure required at 10:00 a.m., with grace period up to 10:10 a.m. |
| Branch-level pricing | Rates must be uniform across branches |
| Customer treatment | Similar deposits accepted on the same date cannot receive discriminatory rates |
| Bulk deposit pricing | Differential rates permitted based on applicable LCR run-off characteristics |
| Non-resident deposits | Similar LCR-based pricing flexibility extended to relevant bulk deposits |
| Technology/process controls | Banks will need robust controls to ensure timely and accurate website updates |
| Compliance monitoring | Greater importance for internal audit, compliance and supervisory review |
6. Overall Assessment
The amendment represents a dual approach of greater transparency coupled with calibrated pricing flexibility.
On one hand, RBI has tightened the transparency and consistency requirements by mandating advance disclosure, a specific daily disclosure time for bulk deposit rates, uniformity across branches and non-discrimination among comparable deposits. On the other hand, banks have been given greater flexibility to differentiate bulk-deposit pricing based on the liquidity characteristics reflected through the LCR framework.
The amendment therefore appears designed to ensure that deposit pricing remains transparent and non-discriminatory while allowing banks to manage liquidity costs and risks more effectively.
7. Recommended Action Points for Banks
Banks should, before October 1, 2026, undertake the following:
- Review and amend their deposit interest-rate policies to incorporate the revised provisions.
- Establish a daily control mechanism ensuring that bulk-deposit rates are published by 10:10 a.m. on every business day.
- Ensure that the rates displayed on the website are consistent with the rates actually applied by branches and other banking offices.
- Review systems to prevent unauthorised or inconsistent branch-level pricing.
- Establish controls to ensure that comparable deposits accepted on the same date receive non-discriminatory treatment.
- Incorporate the relevant LCR run-off characteristics into the framework for pricing eligible bulk deposits.
- Review the pricing framework applicable to non-resident rupee deposits.
- Maintain an appropriate audit trail of rate changes and website disclosures to demonstrate regulatory compliance.
- Align the roles of the Treasury/ALM, Deposit, IT, Compliance, Risk Management and Internal Audit functions.
- Conduct a pre-implementation compliance review before the effective date.
Conclusion
The July 30, 2026 amendment is important from both a deposit-pricing and liquidity-management perspective. It increases regulatory discipline around public disclosure and uniform application of deposit rates, while simultaneously permitting banks to factor liquidity-risk considerations into the pricing of bulk deposits. The most immediate compliance priority is the implementation of the 10:00 a.m.–10:10 a.m. daily disclosure requirement for bulk deposit rates, together with appropriate system and governance controls to ensure consistency between published and applied rates.
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