RBI permits deposit rate changes, mandates daily disclosure

The Reserve Bank of India has issued new rules granting banks greater flexibility to set interest rates on large deposits while simultaneously tightening public disclosure requirements to enhance transparency. The changes, announced on July 30, 2026, will take effect on October 1, 2026.

Under the revised guidelines, banks are permitted to offer different interest rates on bulk deposits of 3 crore rupees and above based on the specific "runoff rate" associated with those funds under the Liquidity Coverage Ratio framework. A runoff rate estimates the percentage of deposits that could be withdrawn during a short-term financial stress scenario. This allows banks to price deposits differently depending on their perceived stability, with less stable, higher-runoff deposits potentially attracting different rates than more stable ones. The central bank clarified this flexibility applies to both domestic rupee deposits and those held by non-resident Indians.

Concurrently, the RBI has mandated stricter transparency. Banks must now publicly disclose all deposit interest rates, including those for bulk deposits, on their websites in advance. Crucially, rates for bulk deposits must be...