TMI BlogReserve Bank of India (Co-operative Banks - Interest Rate on Deposits) Directions, 2016X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: i. Bulk Deposit means single Rupee term deposits of Rupees fifteen lakh and above. ii. Co-operative bank means a State co-operative bank, a Central co-operative bank and a Primary co-operative bank. iii. Current Account means a form of non-interest bearing demand deposit wherefrom withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and shall also be deemed to include other deposit accounts which are neither Savings Deposit nor Term Deposit. iv. Daily product means the interest applied on the end of day balance. v. Demand deposit means a deposit received by the bank, which is withdrawable on demand; vi. Domestic Rupee Deposits mean rupee deposits maintained in India in the form of current account, savings deposits or term deposit. vii. Family includes members as mentioned in the banks Service/Staff Regulations. viii. FCNR(B) account means a Foreign Currency Non-Resident (Bank) account referred to in Foreign Exchange Management (Deposit) Regulatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - II GENERAL GUIDELINES 4. Interest Rate framework Co-operative banks shall pay interest on deposits of money (other than current account deposits) accepted by them or renewed by them in their Domestic, Ordinary Non-Resident (NRO), Non-Resident (External) Accounts (NRE) and Foreign Currency (Non-resident) Accounts (Banks) Scheme {FCNR(B)} deposit account on the terms and conditions specified in these directions: (a) There shall be a comprehensive policy on interest rates on deposits duly approved by the Board of Directors or any committee of the Board to which powers have been delegated. (b) The rates shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another of similar amount, accepted on the same date, at any of its offices. (c) Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance (d) The rates shall not be subject to negotiation between the depositors and the co-operative bank. (e) The interest rates offered shall be reasonable, consistent, transparent and available for supervisory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Deposits Differential interest rate shall be offered only on bulk deposits, Provided that differential interest shall not be applicable on deposit schemes framed on the basis of the Bank Term Deposit Scheme, 2006. iii) Non- availability of premature withdrawal option Co-operative banks shall have the freedom to offer term deposits without premature withdrawal option, Provided that all term deposits accepted from individuals (held singly or jointly) and Hindu Undivided Families for amount of Rupees fifteen lakh and below shall have premature-withdrawal-facility. (b) Payment of Interest on pre-mature withdrawal: The interest rates applicable on term deposits withdrawn before the maturity date shall be as under: i) Interest shall be paid at the rate applicable to the amount and period for which the deposit remained with the co-operative bank and not at the contracted rate. ii) No interest shall be paid, where premature withdrawal of deposits takes place before completion of the minimum period specified in section 7(a)(i). 8. Payment of Additional Interest on domestic deposits (a) Co-operative banks shall, at their discretion, allow additional inter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ta of the Hindu Undivided Family (HUF), even if the Karta is a resident Indian senior citizen. (c) Co-operative banks shall, at their discretion, give their resident Indian retired staff, who are senior citizens, the benefit of additional interest rates as admissible to senior citizens over and above the additional interest payable to them by virtue of their being retired members of the co-operative banks staff. 9. Interest on overdue domestic deposits (a) The rate of interest to be paid on renewal of overdue term deposits shall be subject to the stipulation contained in section 4 of these Directions. (b) If a term deposit matures and proceeds are unpaid, the amount left unclaimed with the co-operative bank shall attract rate of interest as applicable to savings deposits. 10. Floating rate domestic term deposits Floating rate domestic term deposits shall be linked to a directly observable and transparent market determined external benchmark. 11. Periodicity of payment of interest on domestic savings deposits (a) Interest on savings deposit shall be credited at quarterly or longer intervals. (b) Interest on savings bank accounts, including those froz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... est rate shall be offered only on bulk deposits (d) Interest rates on NRE/ NRO deposits shall not be higher than those offered by the co-operative banks on comparable domestic rupee term deposits. (e) The benefit of additional interest rate on deposits on account of being co-operative banks own staff or senior citizens shall not be available to NRE and NRO deposits. (f) Interest on savings deposits shall be credited at quarterly or longer intervals. (g) If an NRE account holder, immediately on return to India, requests for conversion of the NRE term deposit into Resident Foreign Currency Account (RFC), interest shall be paid as under: i. if the NRE deposit has not run for a minimum period of one year, interest shall be paid at a rate not exceeding the rate payable on savings deposits held in RFC accounts. In all other cases, interest shall be paid at the contracted rate. 15. Prohibition on marking lien Co-operative banks shall not mark any type of lien, direct or indirect, against NRE savings deposits. 16. Penalty on premature withdrawal of NRE deposits There shall be a comprehensive policy on penalties for premature withdrawal of NRE term depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposits, including where differential rates of interest are offered, shall be subject to the overall ceiling prescribed at 18 (g) below. (d) Interest on floating rate deposits shall be paid within the ceiling of swap rates for the respective currency/ maturity and in case of fixed rate deposits, interest shall be paid within the ceiling of LIBOR rates for the respective currency / maturity. (e) The interest reset period shall be six months for all floating rate deposits. (f) The LIBOR / SWAP rates as on the last working day of the preceding month shall form the base for fixing ceiling rates for the interest rates offered effective in the following month. (g) The interest rates ceiling on FCNR(B) deposits shall be as under : Period of deposit Ceiling rate 1 year to less than 3 years LIBOR / Swap plus 200 basis points 3 years and above upto and including 5 years LIBOR / Swap plus 300 basis points (h) The LIBOR / Swap rates quoted / displayed by Foreign Exchange Dealers Association of India (FEDAI) shall be used as the reference for arriving at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... remained with the bank beyond the date of maturity. (d) In case of death of the depositor after the date of maturity of the deposit, the interest rate operative on the date of maturity in respect of savings deposits held under Resident Foreign Currency (RFC) Account Scheme shall be paid from the date of maturity till the date of payment. (e) In case the claimants are residents, the maturity proceeds shall be converted into Indian Rupees on the date of maturity and interest shall be paid for the subsequent period at the rate applicable to a domestic term deposit of similar maturity. 22. Payment of interest on FCNR(B) deposits of NRIs on return to India Scheduled co-operative banks (Authorised Dealers) may, at their discretion, on receipt of the request from the depositor, allow FCNR(B) deposits of persons of Indian nationality / origin who return to India for permanent settlement to continue till maturity at the contracted rate of interest subject to the conditions that: (a) The rate of interest as applicable to FCNR(B) deposits shall continue. (b) Such deposits shall be treated as resident deposits from the date of return of the account holder to India. (c) T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eposits. (e) No penalties shall be levied in the case of premature conversion of balances held in FCNR(B) deposits into RFC Accounts by Non-Resident Indians on their return to India. 26. Resident Foreign Currency Accounts Scheme A scheduled co-operative bank (Authorised Dealer) shall have the freedom to determine interest on deposits of money accepted by it or renewed by it under the Resident Foreign Currency Account Scheme, in accordance with the comprehensive policy on interest rates on deposits duly approved by the Board of Directors or any Committee of the Board to which powers have been delegated. CHAPTER - VI PROHIBITIONS AND EXEMPTIONS 27. Prohibitions Co-operative banks shall not: (a) Pay any remuneration or fees or commission or brokerage or incentives on deposits in any form or manner to any individual, firm, company, association, institution or any other person except: i. commission paid to agents employed to collect door-to-door deposits under a special scheme. ii. remuneration paid to Business facilitators or Business Correspondents. ii. incentives granted to staff members as approved by the Reserve Bank of India from time to time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n force in a State or a Union Territory (5) Companies licensed by the Central Government under Section 8 of Companies Act, 2013 or Section 25 of Companies Act, 1956 or under the corresponding provision in the Indian Companies Act, 1913 and permitted, not to add to their names the words 'Limited or the words 'Private Limited (6) Institutions other than those mentioned in section 26(h) and whose entire income is exempt from payment of Income-tax under the Income-Tax Act, 1961 (7) Government departments / bodies / agencies in respect of grants/ subsidies released for implementation of various programmes / Schemes sponsored by Central Government / State Governments subject to production of an authorization from the respective Central / State Government departments to open savings bank account (8) Development of Women and Children in Rural Areas (DWCRA) (9) Self-help Groups (SHGs), registered or unregistered, which are engaged in promoting savings habits among their members ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion Schemes - Offering of Incentives 13 UBD.No.DS.PCB.DIR.24/13.01.00/95-96 30.03.1996 Interest Rates on Deposits 14 RPCD.No.BC.130/07.38.01/95-96 25.04.1996 Advances against Fixed Deposit Receipts (FDRs) issued by Other Banks 15 UBD.No.DS.PCB.Cir.65/13.01.00/95-96 31.05.1996 Advances against Fixed Deposit Receipts (FDRs) issued by Other Banks 16 RPCD.No.DIR.BC.110/07.38.01/96-97 05.03.1997 Interest Rates on Deposits 17 UBD.No.DSP.DIR.25/13.01.00/96-97 19.04.1997 Interest Rates on Deposits 18 UBD.No.DS.PCB.Cir.2/13.01.00/97-98 17.07.1997 Interest Rates on Deposits 19 UBD.No.DS.PCB.Cir.12/13.01.00/97-98 21.10.1997 Interest Rates on Deposits. 20 UBD.No.DS.PCB.CIR.53/13.01.00/97-9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mid-term Review of Annual Policy Statement for the year 2004-05- Reduction of Tenor of Domestic /Ordinary Non-Resident (NRO) Term Deposits 35 UBD.No.28/13.01.00/2004-05 01.11.2004 Mid-term Review of Annual Policy Statement for the Year 2004-05- Reduction of Tenor of Domestic /Ordinary Non-Resident (NRO) Term Deposits 36 RPCD.CO.RF.BC.No.31/ 07.38.01/2009-10 12.10.2009 Payment of Interest on Savings Bank Account on a Daily Product Basis 37 UBD.PCB.BPD.Cir.No.48/13.01.000/2009-10 04.03.2010 Payment of interest on savings bank account on daily product basis 38 UBD.BPD.PCB.Cir.No.13/13.01.000/2011-12 25.11.2011 Deregulation of Savings Bank Deposit Interest Rate 39 RPCD.CO.RCB.BC.No.47/07.38.01/2011-12 26.12.2011 Deregulation of Savings Bank Deposit Interest Rate - Guidelines 40 RPCD.CO.RCB.Dir.BC. No.49/07.38.01/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s on Deposits held under Foreign Currency Non-Resident (Banks) Scheme 9 UBD.No.DS.1/13.02.00/1999-2000 21.09.1999 Interest Rates on Deposits held under Foreign Currency Non-Resident (Banks) Scheme 10 RPCD.No.RF.DIR.BC. 88B/07.38.01/99-2000 27.04.2000 Foreign Currency (Non- Resident) Accounts (Banks) Scheme 11 UBD.No.DS.DIR(AD).9/13.02.00/1999-2000 27.04.2000 Foreign Currency (Non-Resident) Accounts (Banks) Scheme 12 RPCD.No.Dir.BC.23C/07.38.04/2000-01 06.10.2000 Foreign Currency (Non- Resident) Accounts (Banks) Scheme 13 RPCD.CO.No.RF.DIR.BC.66/07.38.04/2000-2001 05.03.2001 Foreign Currency (Non- Resident) Accounts (Banks) Scheme 14 UBD.No.AD.DIR.9/13/02.00/2000-2001 18.05.2001 Foreign Currency (Non-Resident) Accounts (Banks) Scheme 15 RPCD.CO. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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