Mumbai, Nov 29 (KNN) Your bank can now calculate interest on your savings on term deposits at intervals shorter than quarterly intervals, as was the practice earlier.

Such flexibility has been given to the banks by the Reserve Bank of India, since most of the banks have modernised their operations and accounting systems, based on ‘core banking solutions’.

However, giving interest at shorter intervals has not been made mandatory and is still optional for the banks.

In a communication to all scheduled commercial banks, the RBI has said, “banks are functioning on core banking platform, it has been decided to review the above instructions. Accordingly, banks will now have the option to pay interest on Rupee savings and term deposits at intervals shorter than quarterly intervals”.   

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