Avoid Difference in Rates on Similar Term Deposits: RBI to Banks

The Reserve Bank of India (RBI) asked banks to avoid sharply difference in rates on deposits with similar maturities. RBI said that something is wrong with the lenders (banks) if their retail and bulk deposit interest rates vary too much.

The Central Bank observed that banks are offering higher interest rates on bulk deposits to shore up their balance sheets. It is noticed that, a three-month deposit attracts 11% interest rate while a similar tenure retail deposit is offered at 7% only.

The Deputy Governor of RBI asked banks to avoid such moves to offer sharply different rates on deposits with very little differences in maturities.

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