RBI Proposes Greater Flexibility In Bulk Deposit Pricing; Mandates Advance Disclosure

New Delhi, Jun 6 (KNN) The Reserve Bank of India (RBI) has released draft amendment directions proposing to give banks greater flexibility in pricing rupee bulk deposits, while simultaneously tightening transparency and uniformity requirements in the disclosure of deposit interest rates. 

The draft directions cover commercial banks, small finance banks, regional rural banks, payment banks, local area banks, and urban co-operative banks. 

The RBI has invited public comments until June 20, 2026.

What Is Proposed

The draft directions introduce two key changes. First, on transparency, banks will be required to disclose interest rates payable on deposits strictly as per a publicly available schedule on their website, before the commencement of each business day — ensuring that no deviation from published rates is permissible.

Second, on bulk deposit pricing flexibility, commercial banks and small finance banks will be permitted to offer differential interest rates on rupee bulk deposits — for both domestic and non-resident depositors — by taking into account the differential run-off rates applicable under the Liquidity Coverage Ratio (LCR) framework, which distinguishes between retail and non-retail customers.

Context: The HDFC Bank Controversy

The push for greater transparency comes in the backdrop of allegations that HDFC Bank disguised extra interest payments on deposits placed by a Maharashtra government-owned entity as marketing expenditure — an arrangement that, if true, would amount to an undisclosed rate benefit. HDFC Bank has denied the allegations. 

The RBI's proposed disclosure requirements appear aimed at preventing such arrangements across the banking system.

(KNN Bureau)