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RBI Revises Definition of Bulk Deposits

In a notification dated June 7, 2024, titled ‘Amendment to Master Direction – Reserve Bank of India (Interest Rate on Deposits) Directions, 2016’ [RBI/2024-25/40 DoR.SPE.REC. No. 24/13.03.00/2024-2025], the Reserve Bank of India (RBI) announced changes to the definition of ‘bulk deposits’ for all Scheduled Commercial Banks (excluding RRBs), Small Finance Banks, and Local Area Banks.

Previously, as defined in the Master Direction—Reserve Bank of India (Interest Rate on Deposits) Directions, 2016 [RBI/DBR/2015-16/19 Master Direction DBR.Dir.No.84/13.03.00/2015-16], and amended by a circular dated October 26, 2023, ‘bulk deposits’ were characterized as:

  • Single Rupee term deposits of Rs. 2 crore and above for Scheduled Commercial Banks (excluding RRBs) and Small Finance Banks.
  • Single Rupee term deposits of Rs. 1 lakh and above for RRBs.

Following the amendment on June 7, 2024, the definition has been updated to:

  • Single Rupee term deposits of Rs. 3 crore and above for Scheduled Commercial Banks (excluding RRBs) and Small Finance Banks.
  • Single Rupee term deposits of Rs. 1 crore and above for RRBs and Local Area Banks.

These instructions are effective immediately.

The RBI’s updated definitions for bulk deposits represent a crucial regulatory adjustment aimed at better categorization and management of large deposits across different banking segments. RBI Deputy Governor stated that the amendment aims to enhance the asset liability management of banks, facilitating better classification between bulk and retail deposits.