Master Circular for Interest Rates on Rupee Deposits - RBI - Reserve Bank of India
Master Circular for Interest Rates on Rupee Deposits
RBI/2004/102 UBD.No.BPD.MC.No.9_/13.01.00/2003-04 March16, 2004 Chief Executive Officers of Dear Sir, Master Circular Interest Rates on Rupee Deposits
The Reserve Bank of India has been issuing various instructions on the captioned subject from time to time. In order to enable the primary (urban) co-operative banks to have all the currently operative instructions on the subject at once place, a Master Circular has been prepared, which is enclosed. 2.Please acknowledge receipt of this Master Circular to the concerned Regional Office of this Department.
Yours faithfully,
(S. Karuppasamy) Chief General Manager-in-Charge
Encl: As above.
Master Directive Interest Rates on Rupee Deposits 3. Rate of Interest Payable on Current Accounts 4. Rate of Interest Payable on Savings Deposits 5. Interest Rates on Term Deposits 6. Additional Interest Payable 7. Payment of Interest on Term Deposit Maturing on Sunday/Holiday/Non-Business Working Day 8. Premature Withdrawal of Term Deposit 11. Interest Payable on a Deposit Account of Deceased Depositor 12. Rounding-off of Transactions 13. Margin on Advances against Term Deposits 14. Addition or Deletion of the Name(s) or Split into Joint Account Holders 15. Transfer/Split up of the Deposit on the Death of an Account Holder
Master Circular Interest Rates on Rupee Deposits
In exercise of the powers conferred by Sections 21 and 35A read with Section 56 of the Banking Regulation Act, 1949 , the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, has issued directives that no primary (urban) co-operative bank shall pay interest on rupee deposits of money accepted by it or renewed by it, except in accordance with rates as specified in the Annexures 1 & 2, subject to the conditions specified in the paragraphs below.
3. Rate of Interest Payable on Current Accounts
4. Rate of Interest Payable on Savings Deposits
5. interest rates on term deposits
6. Additional Interest Payable
6.2 To Bank's Staff and their Exclusive Associations
(A) In respect of a savings or a term deposit account opened in the name of - (i) a member or retired member of the bank's staff, either singly or jointly with any other member or members of his/her family; or (ii) the spouse of a deceased member or a deceased retired member of the bank's staff; and (iii) an association or a fund, members of which are the members of the bank's staff, Provided that - the bank shall obtain a declaration from the depositor concerned, that the monies deposited or which may, from time to time, be deposited into such account, shall be monies belonging to the depositor as stated in Clauses (i) to (iii) above. Provided further that - (a) in the case of employees taken on deputation from another bank, the bank from which they are deputed may allow additional interest in respect of the savings or term deposit account opened with it, during the same period of deputation; (b) in the case of persons taken on deputation for a fixed duration, or on a contract of a fixed duration, the benefit shall cease to accrue on the expiry of the term of deputation or contract, as the case may be; (B) Payment of additional interest shall be subject to the following conditions, namely : (i) The additional interest shall be payable only so long as the person continues to be eligible for the same and in case of his ceasing to be so eligible, till the maturity of the deposit, in the case of a term deposit account. (ii) In the case of employees taken over pursuant to the scheme of amalgamation, the additional interest shall be allowed only if the interest at the contractual rate together with the additional interest does not exceed the rate which could have been allowed if such employees were originally employed by the bank. (C) Bank employees' federations in which bank employees are not direct members shall not be eligible for additional interest. 6.3 To Managing Director/Chief Executive of the Bank A bank may, at its discretion, pay additional interest not exceeding one per cent per annum over and above the rate of interest stipulated in the Annexures 1 & 2 and the additional interest paid/payable as per paragraph 5.1, on deposits accepted/renewed from Managing Director of the bank; provided he acts as the Chief Executive of the bank drawing regular salary from the bank and he is not eligible to get similar benefit under paragraph 5.2 above. Additional interest on the deposits of Managing Director of the bank as above shall be payable only during the period of his tenure as Managing Director.
7 Payment of Interest on Term Deposit Maturing on Sunday/Holiday/Non-Business Working Day In respect of a term deposit maturing for payment on a Sunday or a holiday or a non-business working day, a bank shall pay interest till the next working day at the originally contracted rate, -
8 Premature Withdrawal of Term Deposit
9. Conversion of a Term Deposit, a Deposit in the form of Daily Deposit, or Recurring Deposit for Reinvestment in Term Deposit
A bank may, at its discretion, renew an overdue deposit or a portion thereof, provided the overdue period from the date of maturity till the date of renewal (both days inclusive) does not exceed 14 days and the rate of interest payable on the amount of the deposit so renewed shall be the appropriate rate of interest for the period of renewal as prevailing on the date of maturity. In the case of overdue deposits where the overdue period exceeds 14 days and if the depositor places the entire amount of overdue deposit or a portion thereof as a fresh term deposit, the bank may fix its own interest rates for the overdue period on the amount so placed as a fresh deposit. 10.2 Non-Resident (External) Rupee Account
11 Interest Payable on a Deposit Account of Deceased Depositor In the case of a term deposit standing in the name of a deceased individual depositor, interest shall be paid in the manner indicated below :
(e) In the case of balance lying in current account standing in the name of deceased individual depositor, interest shall be paid only from 1 August 1983 or the date of death of the depositor, whichever is later, till the date of repayment to the legal heir(s)/representative(s)/nominee(s) at the rate of interest operative in respect of savings deposit applicable as on the date of payment. 12 Rounding-off of Transactions Interest payable on deposits and interest chargeable on advances shall be rounded off to the nearest rupee; i.e., fraction of 50 paise and above shall be rounded off to the next higher rupee and fraction of less than 50 paise shall be ignored. 13 Margin on Advances against Term Deposits A primary (urban) co-operative bank shall maintain a reasonable margin on any financial accommodation allowed against the security of a term deposit. It may determine the margin on a case to case basis. 14 Addition or Deletion of the Name(s) or Split into Joint Account Holders
Provided that in no case, shall the amount, or duration of the original deposit, undergo change in any manner in case the deposit is a term deposit. 15 Transfer/Split up of the Deposit on the Death of an Account Holder
(i) from a banking institution, a co-operative bank, Discount and Finance House of India Ltd. (DFHI). or any other co-operative institution; (ii) for a period not exceeding 14 days from: (1) Life Insurance Corporation of India, (2) Unit Trust of India, (3) General Insurance Corporation of India and its subsidiaries, (4) Industrial Development Bank of India, (5) National Bank for Agriculture and Rural Development, (6) Industrial Credit and Investment Corporation of India Ltd., (7) Industrial Reconstruction Bank of India, (8) Export Credit and Guarantee Corporation of India Ltd., (9) SBI Mutual Fund, (10) Canbank Mutual Fund, (11) Industrial Finance Corporation of India, (12) National Housing Bank, (13) Shipping Credit and Investment Company of India Ltd., (14) Tourism Finance Corporation of India Ltd., (15) Export Import Bank of India, (16) LIC Mutual Fund., (17) Small Industries Development Bank of India., (18) BOI Mutual Fund., (19) Indian Bank Mutual Fund., (20) PNB Mutual Fund., (21) GIC Mutual Fund., (22) BOB Mutual Fund representing money at call or short notice.
17.2 Accounts in the Names of Certain Bodies/Organisations
Master Directive Interest Rates on Rupee Deposits Rate of Interest on Deposits [Vide para 1.1, 4.1, 6.2(i) & 6.3(i)]
Master Directive Interest Rates on Rupee Deposits Rate of Interest on Deposits [Vide para 1.1, 4.1, 6.2(i) & 6.3(i)]
Master Directive Interest Rates on Rupee Deposits A. List of Circulars consolidated in the Master Circular
B. List of Other Circulars from which instructions relating to Interest Rates on Rupee Deposits have also been consolidated in the Master Circular
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