Reserve Bank of India (Rural Co-operative Banks – Interest Rate on Deposits) Directions, 2025

RBI/DOR/2025-26/301 DOR.SOG(SPE).REC.220/13.03.00/2025-26 November 28, 2025 Previous Versions Reserve Bank of India (Rural Co-operative Banks – Interest Rate on Deposits) Directions, 2025 (Updated as on June 17, 2026)

Table of Contents Chapter I : Preliminary A. Short Title and Commencement B. Objective C. Applicability D. Definitions Chapter II : General Guidelines (Interest Rate Framework) Chapter III : Domestic Rupee Deposits A. Interest Rate on Domestic Current Account B. Interest Rate on Domestic Savings Deposit C. Interest Rate on Domestic Term Deposits D. Payment of Additional Interest on Domestic Deposits E. Interest on Overdue Domestic Deposits F. Floating Rate Domestic Term Deposits G. Periodicity of Payment of Interest on Domestic Savings Deposit H. Interest Payable on the Domestic Deposit Account of Deceased Depositor I. Penalty on Premature Withdrawal of Domestic Term Deposit Chapter IV : Rupee Deposits of Non-Residents A. Interest Rate on Rupee Deposits - Non-Residents B. Prohibition on Marking Lien C. Penalty on Premature Withdrawal of Non-Resident External (NRE) Deposits D. Interest Payable on the Non-Resident External (NRE) Term Deposit Account of Deceased Depositor Chapter V : Foreign Currency Deposits A. Foreign Currency (Non-Resident) Accounts (Banks) Scheme B. Manner of Calculation of Interest on Foreign Currency (Non-Resident) Accounts (Banks) {FCNR(B)} Deposits C. Calculation of Interest on Renewal of Foreign Currency (Non-Resident) Accounts (Banks) {FCNR(B)} Deposits D. Interest Payable on the Deposit of a Deceased Foreign Currency (Non-Resident) Accounts (Banks) {FCNR(B)} Depositor E. Payment of Interest on Foreign Currency (Non-Resident) Accounts (Banks) {FCNR(B)} Deposits of Non-Resident Indians (NRIs) on Return to India F. Conversion of Foreign Currency (Non-Resident) Accounts (Banks) {FCNR(B)} Accounts of Returning Indians into Resident Foreign Currency (RFC) Accounts / Resident Rupee Accounts - Payment of Interest G. Premature Withdrawal of Foreign Currency Deposits H. Penalty on Premature Withdrawal of Foreign Currency Deposits I. Resident Foreign Currency Accounts Scheme Chapter VI : Prohibitions and Exemptions A. Prohibitions B. Exemptions SCHEDULE- I Chapter VII : Repeal and Other Provisions A. Repeal and saving B. Application of other laws not barred C. Interpretations

In exercise of the powers conferred by Sections 21 and 35A read with Section 56 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.

Chapter I: Preliminary

A. Short Title and Commencement

1. These Directions shall be called the Reserve Bank of India (Rural Co-operative Banks - Interest Rate on Deposits) Directions, 2025.
2. These Directions shall come into effect on the day it is placed on the official website of the Reserve Bank of India.

B. Objective

3. These Directions provide a framework for Rural Co-operative Banks to follow while formulating their policies on Interest Rate on Deposits.

C. Applicability

4. These Directions shall be applicable to Rural Co-operative Banks (hereinafter collectively referred to as 'banks' and individually as a 'bank').

In this context, ‘Rural Co-operative Banks (RCBs)’ shall mean State Co-operative Banks and Central Co-operative Banks, as defined in the National Bank for Agriculture and Rural Development Act, 1981.

D. Definitions

5. In these Directions, unless the context otherwise requires, the terms herein shall bear the meanings assigned to them below: (1) ‘Alternative Reference Rate (ARR)’ means any widely accepted ARR for the respective currency as prescribed in RBI circular on Roadmap for LIBOR Transition issued vide CO.FMRD.DIRD.S39/14.02.001/2021-22 dated July 08, 2021. (2) ‘Bulk Deposit’ means Single Rupee term deposits of ₹15 lakh and above. (3) ‘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. (4) ‘Daily Product’ means the interest applied on the end of day balance. (5) ‘Demand Deposit’ means a deposit received by a bank, which is withdrawable on demand. (6) ‘Domestic Rupee Deposits’ mean rupee deposits maintained in India in the form of current account, savings deposit or term deposit. (7) ‘Family’ includes members as mentioned in a bank’s Service / Staff Regulations. (8) ‘FCNR(B) Account’ means a Foreign Currency Non-Resident (Bank) account referred to in Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time. (9) ‘Hindu Undivided Family’ (HUF) means HUF as defined under Income-tax Act, 1961. (10) ‘Individual’ means a natural person. (11) ‘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. (12) ‘Notice Deposit’ means term deposit for specific period but withdrawable on giving at least one complete banking day’s notice. (13) ‘NRE Account’ means a Non-Resident External deposit account referred to in Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time. (14) ‘NRO Account’ means a Non-Resident Ordinary deposit account referred to in Foreign Exchange Management (Deposit) Regulations, 2016, as amended from time to time. (15) ‘Reinvestment deposits’ refers to those deposits where interest (as and when due) is reinvested at the same contracted rate till maturity which is withdrawable with the principal amount on maturity date. (16) ‘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. (17) ‘RFC Account’ means a Resident Foreign Currency account referred to in Foreign Exchange Management (Foreign currency accounts by a person resident in India) Regulations, 2016, as amended from time to time. (18) ‘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. (19) ‘Scheduled Co-operative Bank’ means a State Co-operative Bank and a Primary (Urban) Co-operative Bank included in Second Schedule of Reserve Bank of India Act, 1934. (20) ‘Term Deposit’ means an interest-bearing deposit received by a bank for a fixed period and shall also include deposits such as Recurring / Cumulative / Annuity / Reinvestment deposits and Cash Certificates. (21) 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.

Chapter II: General Guidelines (Interest Rate Framework)

6. A bank shall pay interest on deposits (other than current account deposits) accepted or renewed by them in their domestic, Non-Resident Ordinary (NRO), Non-Resident (External) (NRE) and Foreign Currency (Non- Resident) Accounts (Banks) Scheme {FCNR(B)} deposit account on the terms and conditions specified in these directions: (1) There shall be a comprehensive policy duly approved by the Board of Directors or any Committee of the Board to which powers have been delegated in respect of: (i) Interest rate on deposits. (ii) Penalties for premature withdrawal of term deposits, including partial premature withdrawal. (iii) Penalties for premature withdrawal of NRE term deposits. (iv) Penalties for premature withdrawal of FCNR(B) term deposits. (2) 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. (3) Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance. (4) The rates shall not be subject to negotiation between the depositors and the bank. (5) The interest rates offered shall be reasonable, consistent, transparent, and available for supervisory review / scrutiny as and when required. (6) All transactions, involving payment of interest on deposits shall be rounded off to the nearest rupee for rupee deposits and to two decimal places for FCNR(B) deposits. (7) Deposits maturing on a Sunday/ holiday/ non-business working day (i) If a term deposit is maturing for payment on a Sunday/ holiday/ non-business working day, a bank shall pay interest at the originally contracted rate on the original principal deposit amount for the Sunday/ holiday/ non-business working day, intervening between the date of the maturity of the specified term of the deposit and the date of payment of the proceeds of the deposit on the succeeding working day. (ii) In case of reinvestment deposits and recurring deposits, a bank shall pay interest for the intervening non-business working day on the maturity value.