RBI (Commercial Banks – Interest Rate on Deposits) Second Amendment Directions, 2026

 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.

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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:

1. Review and amend their deposit interest-rate policies to incorporate the revised provisions.
2. Establish a daily control mechanism ensuring that bulk-deposit rates are published by 10:10 a.m. on every business day.
3. Ensure that the rates displayed on the website are consistent with the rates actually applied by branches and other banking offices.
4. Review systems to prevent unauthorised or inconsistent branch-level pricing.
5. Establish controls to ensure that comparable deposits accepted on the same date receive non-discriminatory treatment.
6. Incorporate the relevant LCR run-off characteristics into the framework for pricing eligible bulk deposits.
7. Review the pricing framework applicable to non-resident rupee deposits.
8. Maintain an appropriate audit trail of rate changes and website disclosures to demonstrate regulatory compliance.
9. Align the roles of the Treasury/ALM, Deposit, IT, Compliance, Risk Management and Internal Audit functions.
10. 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.

Unregulated Deposits

PIB press release dated 10th July, 2019

Cabinet approves the Banning of Unregulated Deposit Schemes Bill, 2019 

Bill to be introduced in ensuing session of Parliament

Posted On: 10 JUL 2019 6:04PM by PIB Delhi

The Union Cabinet, chaired by the Prime Minister Narendra Modi has approved the banning of Unregulated Deposit Schemes Bill, 2019.  It will replace the banning of Unregulated Deposit Schemes Ordinance, 2019.

The banning of Unregulated Deposit Schemes Bill, 2019 will replace the Ordinance promulgated on 21^stFebruary, 2019, which will otherwise cease to operate after six weeks after reassembly of Parliament. 

Impact

The Bill will help tackle the menace of illicit deposit taking activities in the country, which at present are exploiting regulatory gaps and lack of strict administrative measures to dupe poor and gullible people of their hard-earned savings.

Background

 The banning of Unregulated Deposit Scheme Bill, 2018 was considered by the Lok Sabha in its sitting held on 13^th February, 2019 and after discussion, the same was passed, as amended through the proposed official amendments, as the banning of Unregulated Deposit Scheme Bill, 2019.  However, before the same could be considered and passed in the Rajya Sabha, the Rajya Sabha was adjourned sine die on the same day.

Unregulated Deposits

PIB press release dated 6th February, 2019

The Union Cabinet, chaired by the Prime Minister  Narendra Modi, has given its approval to move official amendments to the Banning of Unregulated Deposit Schemes Bill, 2018, pursuant to the recommendations of the Standing Committee on Finance (SCF). The Banning of Unregulated Deposit Schemes Bill, 2018 was introduced in Parliament on 18th July, 2018 and was referred to the SCF, which submitted its Seventieth Report on the said Bill to Parliament on 3rd January, 2019. The official amendments will further strengthen the Bill in its objective to effectively tackle the menace of illicit deposit taking activities in the country, and prevent such schemes from duping poor and gullible people of their hard earned savings.

Salient features:

• The Bill contains a substantive banning clause which bans Deposit Takers from promoting, operating, issuing advertisements or accepting deposits in any Unregulated Deposit Scheme. The principle is that the Bill would ban unregulated deposit taking activities altogether, by making them an offence ex-ante rather than the existing legislative-cum-regulatory framework which only comes into effect ex-post with considerable time lags;
• The Bill creates three different types of offences, namely, running of Unregulated Deposit Schemes, fraudulent default in Regulated Deposit Schemes, and wrongful inducement in relation to Unregulated Deposit Schemes.
• The Bill provides for severe punishment and heavy pecuniary fines to act as deterrent.
• The Bill has adequate provisions for disgorgement or repayment of deposits in cases where such schemes nonetheless manage to raise deposits illegally.
• The Bill provides for attachment of properties / assets by the Competent Authority, and subsequent realization of assets for repayment to depositors;
• Clear-cut time lines have been provided for attachment of property and restitution to depositors;
• The Bill enables creation of an online central database, for collection and sharing of information on deposit-taking activities in the country;
• The Bill defines “Deposit Taker” and “Deposit” comprehensively;
• “Deposit Takers” include all possible entities (including individuals) receiving or soliciting deposits, except specific entities such as those incorporated by legislation;
• “Deposit” is defined in such a manner that deposit-takers are restricted from camouflaging public deposits as receipts, and at the same time, not to curb or hinder acceptance of money by an establishment in the ordinary course of its business; and
• Being a comprehensive Union Law, the Bill adopts best practices from State laws, while entrusting the primary responsibility of implementing the provisions of the legislation to the State Governments.

Background:

The Finance Minister in the Budget Speech 2016-17 had announced that a comprehensive Central legislation would be brought in to deal with the menace of illicit deposit taking schemes, as in the recent past, there have been rising instances of people in various parts of the country being defrauded by illicit deposit taking schemes. The worst victims of these schemes are the poor and the financially illiterate, and the operations of such schemes are often spread over many States. As per information provided by RBI, during the period between July, 2014 and May, 2018, 978 cases of unauthorized schemes were discussed in State Level Coordination Committee (SLCC) meetings in various States/UTs and were given to the respective regulators/law enforcement agencies in the states. A large number of such instances have been reported from the eastern part of the country. Subsequently, the  Finance Minister in the Budget Speech 2017-18 had announced that the draft bill to curtail the menace of illicit deposit schemes had been placed in the public domain and would be introduced shortly after its finalisation.

The Banning of Unregulated Deposit Schemes Bill, 2018, which was introduced in Parliament on 18th July, 2018 provides a comprehensive legislation to deal with the menace of illicit deposit schemes in the country through, (a) complete prohibition of unregulated deposit taking activity; (b) deterrent punishment for promoting or operating an unregulated deposit taking scheme; (c) stringent punishment for fraudulent default in repayment to depositors; (d) designation of a Competent Authority by the State Government to ensure repayment of deposits in the event of default by a deposit taking establishment; (e) powers and functions of the competent authority including the power to attach assets of a defaulting establishment; (f) Designation of Courts to oversee repayment of depositors and to try offences under the Act; and (g) listing of Regulated Deposit Schemes in the Bill, with a clause enabling the Central Government to expand or prune the list.

deposits rules - amendment

MCA has vide its notification dated 22nd January, 2019 amended the Companies (Acceptance of Deposits), Rules, 2014. The salient features of the amendments are as follows:

1) Any amount received by a company from Real Estate Investment Trusts will be treated as exempt deposits as per amendment to 2(1)(c)(xviii);

2) In Rule 16, an explanation has been added which says that form DPT-3 shall be used for filing return of deposit or particulars of transaction not considered as deposit, or both, by every company, other than government company.

This means that particulars of exempted deposits such as unsecured loans from directors, their relatives, shareholders (within the limit), inter-corporate borrowings etc. all need to be reported in this format.

Further, fail to understand why government companies are exempted from this requirement. If the government is serious about corporate governance, then in my view even government companies should have been asked to comply.

Rule 16 pertains to a return of deposits to be filed with the Registrar in form DPT-3.

3) Rule 16A has been amended by inserting a sub-rule (3), which states that every company, other than a government company,  shall file a one time return of outstanding receipt of money or loan by a company but not considered as deposits, from 1st April, 2014 to the date of the notification of this amendment i.e. 22nd January, 2019 in form DPT-3 within 90 days from the date of publication of this notification alongwith fees.

Rule 16A pertains to disclosures in the financial statements and Rule 16 pertains to return of deposits. Unable to comprehend why this amendment has been carried out in Rule 16A rather than Rule 16 which is the correct rule for this subject matter, which is yet another return. Especially when they have made an amendment to Rule 16 giving an explanation as above, amendment of this item in the Rule 16 would have been apt. Another feature I have observed is the bad drafting in the sub-rule (3). They have mentioned "outstanding receipt of money or loan by a company" it should have been "outstanding receipt of money or loan received by a company."

It is also not clear, "outstanding" as on what date - 22nd January, 2019 or the last audited financial year ended date i.e. 31st March, 2018.

It is also not clear whether this one time return is required to be audited by the auditors of the company as normally DPT-3 is required to be so audited if filed every financial year.

Here also unable to comprehend why the government companies are exempt from this requirement. Frankly, if the Indian government is serious about corporate governance then they should make an example out of  the government companies in asking them to comply equally with non government companies.

So another one time return to be filed by all the companies in India along with the requisite fees. So an added one time compliance like the KYC one which came in August- September, 2018. This form DPT-3 to be filed within 90 days i.e. on or before 21st April, 2019. Its going to be mayhem in India Inc. because the 2nd round of KYC compliance will start from 1st April, 2019 onwards and that will run for a month and then this compliance will simultaneously run in April 2019. Knowing the tendency and propensity of companies to sleep until the last minute, its going to be mayhem in April, 2019

So much for ease of doing business in India.

Share Application Moneys

MCA has issued notification on 31st March, 2015 amending the Companies (Acceptance of Deposits) Rules, 2014 to provide that share application moneys which were disclosed as such in the accounts for year ended 31st March, 2014 and pending allotment as on 31st March, 2015 should be either allotted before 1st  June, 2015 or returned therewith to the allottees before the said date.

Further every eligible company i.e. every company which is eligible to receive deposits should obtain credit rating for deposits accepted by it in the manner specified from the specified rating agencies and a copy of the rating report should be furnished to the MCA in form DPT-3. So additional compliance requirement for companies which accept deposits.

Further the requirement of having a deposit insurance has been postponed to 31st March, 2016 or till such deposit insurance product is available on the market whichever is earlier.

Copy of the MCA notification is given below.

http://www.mca.gov.in/Ministry/pdf/Acceptance_Deposits_AmendmentRules_01042015.pdf