RBI Increases Bulk Fixed Deposit Threshold to Rs 3 Crore

The Reserve Bank of India (RBI) has revised the threshold for bulk fixed deposits, increasing it from Rs 2 crore to Rs 3 crore. Announced by RBI Governor Shaktikanta Das, this change aims to improve liquidity management and update deposit classifications in line with current economic demands.

Increased Interest Rates for Bulk Fixed Deposits: Bulk fixed deposits, now starting at Rs 3 crore, generally offer higher interest rates than retail term deposits. This distinction helps banks manage their liquidity more effectively. Retail fixed deposits are now defined as deposits up to Rs 2 crore for Scheduled Commercial Banks (excluding Regional Rural Banks) and Small Finance Banks.

New Definitions for Bulk Deposits

To standardize banking practices, the RBI has redefined bulk deposits. For Scheduled Commercial Banks and Small Finance Banks, bulk deposits will be those of Rs 3 crore and above. For Local Area Banks and Regional Rural Banks, the threshold is set at Rs 1 crore.

Simplifying International Trade with Revised FEMA Guidelines: The RBI plans to streamline international trade processes by revising guidelines under the Foreign Exchange Management Act (FEMA) of 1999. This initiative is designed to provide more operational flexibility for authorized dealer banks and promote ease of doing business. Draft guidelines will be released soon for stakeholder feedback.

Enhancing Security in Digital Payments: In response to the increase in digital payment frauds, the RBI proposes the creation of a Digital Payments Intelligence Platform. This platform aims to enhance security and consumer confidence by providing network-level intelligence and real-time data sharing across the digital payments ecosystem. A committee has been formed to explore the development of this platform.

Encouraging Fintech Innovation: The RBI continues to support innovation in the fintech sector with the announcement of the third edition of its global hackathon, ‘HaRBInger – Innovation for Transformation’. Scheduled for 2024, ‘HaRBInger 2024’ will focus on themes such as ‘Zero Financial Frauds’ and ‘Being Divyang Friendly’. This follows the successful completion of the first two editions in 2022 and 2023.

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