The Reserve Bank Of India Has Amended The Norms For TDs

The Reserve Bank of India (RBI) has amended the norms as per which unclaimed maturity proceeds of term deposits (TDs) with banks will attract the rate of interest as applicable to savings accounts or the contracted rate of interest on the matured TD, whichever is lower.

As per the current rules, if a term deposit matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract a rate of interest as applicable to savings deposits.

"On a review of these instructions, it has been decided that if a Term Deposit (TD) matures and proceeds are unpaid, the amount left unclaimed with the bank shall attract a rate of interest as applicable to a savings account or the contracted rate of interest on the matured TD, whichever is lower," the RBI said in a circular.

Term deposit refers to an interest-bearing deposit received by the bank for a fixed period

Photo by Unsplash

There will be a similar norm in terms of term deposits in cooperative banks.

The central bank has sent out a circular to all scheduled commercial banks, small finance banks, local area banks, primary (urban) co-operative banks, district central co-operative banks, and state co-operative banks, in this regard.

ALSO READ Yes bank story tale of India's biggest bank failures

Term deposit refers to an interest-bearing deposit received by the bank for a fixed period and shall also include deposits such as recurring, cumulative, annuity, reinvestment deposits, and cash certificates. (IANS/AD)