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Corporate Laws Central Ministry of Finance Reserve Bank of India Act, 1934

Reserve Bank of India (Urban Co-operative Banks - Interest Rate on Deposits) Directions, 2025

28-Nov-2025 | RBI/DOR/2025-26/276 DOR.SOG(SPE).REC.195/13.03.00/ 2025-26

RBI has issued RBI (Urban Co-operative Banks - Interest Rate on Deposits) Directions, 2025 effective from 28th November 2025.

Key Highlights:
1. Applicability - All Urban Co-operative Banks (UCBs) defined under the Banking Regulation Act.
2. Uniform and Transparent Interest Rates - Interest rates must be the same for all customers for similar deposits on the same day. No negotiations or discriminatory rates are allowed.
3. Domestic Deposit Rules -
a. No interest on current accounts.
b. Savings account interest is calculated daily; one uniform rate up to Rs. 1 lakh is mandatory.
c. Term deposit interest may vary only by tenure, deposit size (bulk), or absence of premature withdrawal option.
d. Early withdrawal earns interest only for the actual period run.
3. Rules for Non-Resident (NRE/NRO) Deposits -
a. Only authorised banks may accept such deposits.
b. Interest rules mirror those of domestic deposits but with minimum tenors (1 year for NRE, 7 days for NRO).
c. No staff/senior citizen additional interest is allowed on NRE/NRO deposits.
d. NRE lien marking is prohibited.
4. Prohibitions for Banks - Banks cannot offer gifts, prizes, lottery-type schemes, extra incentives, or commissions (except specified cases), nor open savings accounts for government bodies, political parties, or business entities. They also cannot accept interest-free deposits (except current accounts) or accept deposits routed through private financiers.


For more information, please refer to the attached document.

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