RBI/2013-14/393
RPCD.CO.RRB.BC.NO. 62 /03.05.33/2013-14

December 2, 2013

The Chairmen
Regional Rural Banks

Dear Sir/Madam,

Periodicity of Payment of Interest on Rupee Savings/Term Deposits

Please refer to paragraph 23 of the Second Quarter Review of Monetary Policy 2013-14 announced on October 29, 2013 (extract enclosed) on periodicity of payment of interest on savings and term deposits.

2. In this connection, a reference is also invited to paragraph 2 (ii) of our circular DBOD.No.Dir.BC.46/13.03.00/2000-2001 dated November 4, 2000 on 'Interest Rates on Rupee Deposits held in Domestic, Ordinary Non-Resident (NRO), Non-Resident Special Rupee (NRSR) and Non-Resident (External) (NRE) Accounts' whereby Regional Rural Banks (RRBs) were advised to pay interest on savings and term deposits at quarterly or longer rests. As RRBs are functioning on core banking platform, it has been decided to review the above instructions. Accordingly, RRBs will now have the option to pay interest on Rupee savings and term deposits at intervals shorter than quarterly intervals.

3. The above revised instructions are applicable to domestic Rupee deposits including Ordinary Non-Resident (NRO) and Non-Resident (External) (NRE) savings and term deposits. As regard FCNR(B) deposits, the existing guidelines issued in this regard will remain unchanged.

Yours faithfully,

(A.Udgata)
Principal Chief General Manager