RBI: Allow premature withdrawal of deposits

The RBI has said that henceforth, banks must allow pre-mature withdrawals on all bank deposits up to Rs 1 crore. The central bank has hiked the minimum limit for 'non-callable' fixed deposits to Rs 1 crore from Rs 15 lakhs earlier. RBI had earlier allowed banks to offer higher rates on unbreakable fixed deposits that could not be withdrawn before maturity. Banks are incentivised to offer higher deposit rates without a pre-mature withdrawal facility during a rising interest rate regime. Non-callable deposits prevent customers from withdrawing their money mid-term if interest rates rise.

from Business News: Latest News on Business, Stock Markets, Financial News, India Business & World Business News https://ift.tt/RwQkU6N