RBI/2008-09/452
DBOD. No. Dir. BC.128/13.03.00/2008-09
April 24, 2009
All Scheduled Commercial Banks (Excluding RRBs)
Please refer to paragraph 88 of the Annual Policy Statement announced by
Governor on April 21, 2009
(extract
enclosed), in terms of which it has been proposed that payment of interest
on savings bank accounts by scheduled commercial banks would be calculated on a
daily product basis with effect from April 1, 2010 . In terms of extant guidelines, as per
paragraph 2.2B of the Master
Circular dated July 1, 2008 on Interest Rates on Rupee Deposits held in
Domestic, Ordinary Non-Resident (NRO) and Non-Resident (External) (NRE)
Accounts, banks have been advised that in the case of savings deposits,
interest should be calculated on the minimum balance to the credit of the
deposit account during the period from the 10th to the last day of each
calendar month and credited to the account only when it is Re.1/- or more.
Several banks had suggested that interest on savings bank accounts may be
calculated either on the minimum balances in the deposit accounts during the
period from the first to the last day of each calendar month or on a daily
product basis. The matter was referred to the Indian Banks' Association, which
was of the view that payment of interest on a daily product basis would be
feasible only when computerisation in banks is completed.
We advise that on a review, and in
view of the present satisfactory level of computerisation in commercial bank
branches, it is proposed that payment of interest on savings bank accounts by
scheduled commercial banks would be calculated on a daily product basis with
effect from April 1,
2010 . In order to ensure a smooth transition, banks may
work out the modalities in this regard.
Reserve Bank of
Interest Rate Policy
Payment
of Interest on Savings Bank Account on a Daily Product Basis
_____________________________________________________________________________________________________________________________________________________________________________________________
At
present, interest on savings bank accounts is calculated on the minimum
balances held in the accounts during the period from the 10th day to the last
day of each calendar month. Several banks have suggested that interest on
savings bank accounts may be calculated either on the minimum balances in the
deposit accounts during the period from the first to the last day of each
calendar month or on a daily product basis. The matter was referred to the IBA,
which was of the view that payment of interest on a daily product basis would
be feasible only when computerisation in banks is completed. In view of the
present satisfactory level of computerisation in commercial bank branches, it
is proposed that
:
* payment
of interest on savings bank accounts by scheduled commercial banks (SCBs) would
be calculated on a daily product basis with effect from April 1, 2010
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