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The Reserve Bank of India (RBI) has increased the minimum amount for offering non-callable/without premature withdrawal option term deposits (TDs) from ₹15 lakh to ₹1 crore.
What this means is that all domestic term deposits accepted from individuals for amount of ₹1 crore and below shall have premature-withdrawal-facility.
The central bank said its instructions in this regard shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit / Ordinary Non-Resident (NRO) Deposits.
As per the RBI’s Master Direction “on Interest Rate on Deposits”, banks are permitted to offer differential rate on interest on TDs based on non-callability of deposits (i.e., non-availability of premature withdrawal option) in addition to tenor and size of deposits.
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