Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Directions, 2025
RBI master-direction RBI/DOR/2025-26/212 · 28 Nov 2025
RBI master-direction RBI/DOR/2025-26/212 · 28 Nov 2025
Summary
Check the official recordThe Reserve Bank of India establishes a framework for Payments Banks to manage interest rates on domestic rupee deposits. Banks must create a board-approved policy for interest rates that ensures uniformity across branches and customers. The directions prohibit interest payments on current accounts, except for deceased depositor balances. For savings deposits, banks must calculate interest on a daily product basis and may offer differential rates for balances exceeding ₹1 lakh. Banks may provide an additional one percent interest to staff and specific associations under defined conditions. The guidelines restrict deposit mobilization practices, including prohibitions on lottery-based incentives and unauthorized account openings for government or business entities. These directions take effect upon publication on the official Reserve Bank of India website.
What you must do
Key dates
Who is affected
Thresholds
Exceptions
If you do not comply
RBI/DOR/2025-26/212
DOR.SOG(SPE).REC.131/13.03.00/2025-26
November 28, 2025
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.
‘Current Account’ means a form of non-interest bearing demand deposit where from withdrawals are allowed any number of times depending upon the balance in the account or up to a particular agreed amount and shall also be deemed to include other deposit accounts which are neither Savings Deposit nor Term Deposit.
‘Daily Product’ means the interest applied on the end of day balance.
‘Demand Deposit’ means a deposit received by a bank, which is withdrawable on demand.
‘Domestic Rupee Deposits’ mean rupee deposits maintained in India in the form of current account or savings deposit.
‘Family’ includes members as mentioned in a bank’s Service / Staff Regulations.
‘Hindu Undivided Family’ (HUF) means HUF as defined under Income-tax Act, 1961.
‘Individual’ means a natural person.
‘Member of the bank’s Staff’ means a person employed on a regular basis, whether full-time or part-time, and includes a person recruited on probation or employed on a contract for a specified duration or on deputation and an employee taken over in pursuance of any scheme of amalgamation but does not include a person employed on casual basis.
‘Retired Member of the bank’s Staff’ means an employee retiring whether on superannuation or otherwise as provided in the bank’s Service / Staff Regulations.
‘Savings Deposit’ means a form of interest bearing demand deposit which is a deposit account whether designated as ‘Savings Account’, ‘Savings Bank Account’, ‘Savings Deposit Account’, ‘Basic Savings Bank Deposit Account (BSBDA)’ or other account by whatever name called which is subject to the restrictions as to the number of withdrawals as also the amounts of withdrawals permitted by a bank during any specified period.
All other expressions, unless defined herein, shall have the same meaning as have been assigned to them under the Banking Regulation Act,1949 or the Reserve Bank of India Act, 1934 or any statutory modification or re-enactment thereto or as used in commercial parlance, as the case may be.
There shall be a comprehensive policy on Interest Rate on Deposits duly approved by the Board of Directors or any Committee of the Board to which powers have been delegated.
The interest rates offered on deposits shall be uniform across all branches and for all customers and there shall be no discrimination in the matter of interest paid on the deposits, between one deposit and another deposit of similar amount, accepted on the same date, at any of its offices.
Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance.
The rates shall not be subject to negotiation between the depositors and the bank.
The interest rates offered shall be reasonable, consistent, transparent, and available for supervisory review / scrutiny as and when required.
All transactions, involving payment of interest on deposits shall be rounded off to the nearest rupee.
Provided that balances lying in current account standing in the name of a deceased individual depositor or sole proprietorship concern shall attract interest from the date of death of the depositor till the date of repayment to the claimant(s) at the rate of interest applicable to savings deposit as on the date of payment.
(1) Interest shall be calculated on a daily product basis as under:
A uniform interest rate shall be set on balance up to ₹1 lakh, irrespective of the amount in the account within this limit.
Differential rates of interest may be provided for any end-of-day savings bank account balance exceeding ₹1 lakh.
(1) The additional interest is payable till the person continues to be eligible for the same.
(2) In case of employees taken over pursuant to the scheme of amalgamation, the additional interest is 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.
(3) 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 deposit account opened with it during the period of deputation.
(4) In the case of persons taken on deputation for a fixed tenure or on a contract of a fixed tenure, the benefit will cease to accrue on the expiry of the term of deputation or contract, as the case may be.
(5) Bank Employees’ Federations, in which bank employees are not direct members, shall not be eligible for additional interest.
(6) The additional interest may be paid on the following deposits after obtaining a declaration from the depositor concerned, that the monies deposited or which may be deposited from time to time into such account belong to the depositor: