RBI Proposes Deposit Rate Changes as Banks Need Greater Flexibility in Pricing Bulk Deposits

The Reserve Bank of India (RBI) has released draft “Reserve Bank of India (Interest Rate on Deposits) Amendment Directions, 2026” for various regulated entities, including commercial banks, small finance banks, regional rural banks, payment banks, local area banks, and urban co-operative banks. The proposed amendments aim to provide greater flexibility to banks in pricing Rupee bulk deposits while ensuring uniformity and transparency in the disclosure of deposit interest rates. For Small Finance Banks, the draft specifically permits differential interest rates on bulk deposits based on applicable run-off rates under the Liquidity Coverage Ratio (LCR) framework for retail and non-retail customers. Across all categories of regulated entities, the RBI has proposed that interest rates payable on deposits must strictly conform to the schedule disclosed in advance on the bank’s website before the commencement of the business day. RBI has invited comments and feedback from stakeholders and the public on the draft directions by June 20, 2026.

Reserve Bank of India

Date : Jun 05, 2026

RBI invites comments on the draft “Reserve Bank of India (Interest Rate on Deposits) Amendment Directions, 2026

In order to provide greater flexibility to banks for pricing their Rupee bulk deposits, while ensuring uniformity in disclosure of interest rates on deposits, the Reserve Bank of India has today released the following draft Amendment Directions:

I. Reserve Bank of India (Commercial Banks – Interest Rate on Deposits) Amendment Directions, 2026.

II. Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Amendment Directions, 2026.

III. Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Amendment Directions, 2026.

IV. Reserve Bank of India (Payment Banks – Interest Rate on Deposits) Amendment Directions, 2026.

V. Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Amendment Directions, 2026.

VI. Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Amendment Directions, 2026.

2. The comments / feedback on the draft Amendment Directions may be submitted by the regulated entities and members of public/other stakeholders on or before June 20, 2026, through the following channels:

i. the ‘Connect 2 Regulate’ section on the website by following the corresponding hyperlink provided against each document in the page where they are hosted; or

ii. by emailwith the subject line ‘Feedback on (full name of the draft Amendment Directions (including the type of Regulated Entity))’.

(Brij Raj)
Chief General Manager

Press Release: 2026-2027/399

Reserve Bank of India

Draft Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Amendment Directions, 2026

RBI/2026-27/ __
DOR.SOG(SPE).REC. XX/13.03.00/ 2026-27

XX, 2026

Draft Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025. On a review, it has been decided to issue revised instructions pertaining to interest rate on Rupee bulk deposits and disclosure of interest rates on deposits.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Amendment Directions, 2026.

4. These Amendment Directions shall come into effect from the date of issue.

5. These Amendment Directions shall modify the Directions as under:

(1) In Chapter II on ‘General Guidelines (Interest Rate Framework)‘, the paragraph 6(3) shall be substituted by the following, namely:

‘Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website, before the commencement of the Business Day’.

(2) In Chapter III on ‘Domestic Rupee Deposits’, after sub-paragraph 9(3), the following new sub-paragraph shall be inserted, namely:

9(4) Applicable run-off rates under Liquidity Coverage Ratio (LCR) framework

A bank shall have the freedom to offer differential interest rate on bulk deposits, by considering the differential run-off rate applicable to deposits or unsecured wholesale funding from retail or non-retail customers, respectively under the LCR framework, as specified in the ‘Reserve Bank of India (Small Finance Banks – Asset Liability Management) Directions, 2025.

(3) In Chapter IV on ‘Rupee Deposits of Non-Residents’, after sub-paragraph 26(3)(iii), the following new sub-paragraph shall be inserted, namely:

26(3)(iv) Applicable run-off rates under Liquidity Coverage Ratio (LCR) framework

A bank shall have the freedom to offer differential interest rate on bulk deposits, by considering the differential run-off rate applicable to deposits or unsecured wholesale funding from retail or non-retail customers, respectively under the LCR framework, as specified in the ‘Reserve Bank of India (Small Finance Banks – Asset Liability Management) Directions, 2025.

(Dr. Sudarsana Sahoo)
Chief General Manager

Reserve Bank of India

Draft Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Amendment Directions, 2026

RBI/2026-27/ __
DOR.SOG(SPE).REC. XX /13.03.00/ 2026-27

XX, 2026

Draft Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Amendment Directions, 2026

Please refer to theReserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025. On a review, it has been decided to issue revised instructions pertaining to disclosure of interest rates on deposits.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Regional Rural Banks – Interest Rate on Deposits) Amendment Directions, 2026.

4. These Amendment Directions shall come into effect from the date of issue.

5. These Amendment Directions shall modify the Directions, as under:

(1) In Chapter II on ‘General Guidelines (Interest Rate Framework)’, the paragraph 6(3) shall be substituted by the following, namely:

‘Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website, before the commencement of the Business Day.’

(Dr. Sudarsana Sahoo)
Chief General Manager

Reserve Bank of India

Draft Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Amendment Directions, 2026

RBI/2026-27/ __
DOR.SOG(SPE).REC. XX/13.03.00/ 2026-27

XX, 2026

Draft Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025. On a review, it has been decided to issue revised instructions pertaining to disclosure of interest rates on deposits.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Amendment Directions, 2026.

4. These Amendment Directions shall come into effect from the date of issue.

5. These Amendment Directions shall modify the Directions as under:

(1) In Chapter II on ‘General Guidelines (Interest Rate Framework)‘, the paragraph 6.3 shall be substituted by the following, namely:

‘Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website, before the commencement of the Business Day.’

(Dr. Sudarsana Sahoo)
Chief General Manager

Reserve Bank of India

Draft Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Amendment Directions, 2026

RBI/2026-27/ __
DOR.SOG(SPE).REC. XX /13.03.00/ 2026-27

XX, 2026

Draft Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025. On a review, it has been decided to issue revised instructions pertaining to disclosure of interest rates on deposits.

2. Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Amendment Directions, 2026.

4. These Amendment Directions shall come into effect from the date of issue.

5. These Amendment Directions shall modify the Directions as under:

(1) In Chapter II on ‘General Guidelines (Interest Rate Framework)‘, the paragraph 6(3) shall be substituted by the following, namely:

‘Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website, before the commencement of the Business Day.’

(Dr. Sudarsana Sahoo)
Chief General Manager

Reserve Bank of India

Draft Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Amendment Directions, 2026

RBI/2026-27/ __
DOR.SOG(SPE).REC. XX /13.03.00/ 2026-27

XX, 2026

Draft Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Amendment Directions, 2026

Please refer to the Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Directions, 2025 (hereinafter referred to as ‘Directions’), dated November 28, 2025. On a review, it has been decided to issue revised instructions pertaining to disclosure of interest rates on deposits.

2. Accordingly, in exercise of the powers conferred by Section 35A read with Section 56 of the Banking Regulation Act,1949 and all other laws enabling the Reserve Bank India (RBI) in this regard, the RBI, being satisfied that it is necessary and expedient in public interest so to do, hereby issues the Amendment Directions hereinafter specified.

3. These Amendment Directions shall be called the Reserve Bank of India (Urban Co-operative Banks – Interest Rate on Deposits) Amendment Directions, 2026.

4. These Amendment Directions shall come into effect from the date of issue.

5. These Amendment Directions shall modify the Directions, as under:

(1) In Chapter II on ‘General Guidelines (Interest Rate Framework)‘, the paragraph 6(3) shall be substituted by the following, namely:

‘Interest rates payable on deposits shall be strictly as per the schedule of interest rates disclosed in advance on the bank’s website, before the commencement of the Business Day.’

(Dr. Sudarsana Sahoo)
Chief General Manager