RBI /2012-13/334
RPCD.RRB.BC.No.52/03.05.33/2012-13

December 14, 2012

All Regional Rural Banks

Dear Sir/Madam

Conversion of Term Deposits, Daily Deposits or Recurring Deposits for Reinvestment in Term Deposits by Regional Rural Banks

As per extant instructions on Interest Rates on Deposits, RRBs on request from the depositor, should allow closure of a term deposit, a deposit in the form of daily deposit or recurring deposit, to enable the depositor to immediately reinvest the amount lying in the aforesaid deposits with the same bank in another term deposit. RRBs are required to pay interest in respect of such term deposit without reducing the interest by way of penalty provided that deposit remains with the bank after reinvestment for a period longer than the remaining period of the original contract.

2. On a review of the extant regulatory norms, and in order to facilitate better Asset Liability Management (ALM), it has been decided to permit banks to formulate their own policies towards conversion of deposits with immediate effect.

Yours faithfully

(Beena Abdulrahman)
Deputy General Manager

More Under Fema / RBI

Leave a Comment

Your email address will not be published. Required fields are marked *

Search Posts by Date

September 2021
M T W T F S S
 12345
6789101112
13141516171819
20212223242526
27282930