Recent Updates for Fixed Deposit Holders in India
Good news is on the horizon for those who have parked their money in fixed deposits in India. The Reserve Bank of India (RBI), the nation’s central banking authority, has recently announced some pivotal changes for fixed deposit users. Let’s dive deeper into these updates.
Changes to Premature Withdrawal Limits:
Previously, the upper cap for premature withdrawal from fixed deposits without incurring a penalty was set at 15 lakh rupees. However, in a fresh directive, the RBI has revised this limit, allowing banks to facilitate premature withdrawals for fixed deposits up to a whopping 1 crore rupees. This significant uptick is expected to offer more flexibility and liquidity to depositors, giving them enhanced access to their funds when needed.
Moreover, in addition to the pre-existing standards for the tenure and size of the deposit, banks now have the discretion to offer differentiated interest rates based on whether the option for premature withdrawal is present or absent.
This directive has been made immediately applicable to all commercial banks as well as cooperative banks operating in the country.
Enhanced Limits for Regional Rural Banks (RRBs):
In another notable change, the RBI has elevated the bulk deposit threshold for Regional Rural Banks (RRBs). Previously at 15 lakh rupees, the new ceiling has been set at 1 crore rupees and above.
Compensation for Credit Information Delays:
Additionally, the RBI has mandated that credit information companies (CICs) compensate customers with a sum of 100 rupees per day for any delays in rectifying discrepancies in their credit information. To implement this new system, credit institutions and credit information companies have been granted a transition period of six months.
These reforms showcase the RBI’s proactive stance in enhancing customer experience and ensuring transparency and accountability within the financial ecosystem. Fixed deposit holders, in particular, will benefit from increased liquidity options, while the added compensation directive ensures that credit information companies remain diligent in their duties.
