Banks can pay Term Deposit Interest at Less than Quarterly Intervals: RBI
Banks can pay interest on rupee savings and term deposits for periods shorter thanQuarterly intervals , the Reserve bank of India said in a notification on Friday.
Earlier, banks were required to pay interest on savings deposits and term depositsat quarterly or long intervals.
However, in its second quarter review of the monetary policy on October 29, the RBIhad said that since all commercial banks have moved crore banking platforms, theRBI will give banks the option to pay interest on savings deposits and term depositsat interval shorter than quarterly intervals.
"The revised instruction are applicable to domestic rupee deposits, including OrdinaryNon-Resident and Non-resident (External) savings and term deposit.
As regards FCNR (B) deposits, the existing guidelines issued in this regards will remain unchanged," the RBI said.
Business Line, New Delhi, 30-11-2013