Mumbai: The Reserve Bank of India (RBI) on Friday tweaked the norms for interest on the amount left unclaimed with the bank after a term deposit matures. Currently, if a term deposit matures and the proceeds are unpaid, the amount left unclaimed with the bank attracts the rate of interest as applicable to savings deposits.
"On a review...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. The new norms are applicable for deposits in all commercial banks, small finance banks, local area banks, and cooperative banks.
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Term deposit refers to an interest-bearing deposit received by the bank for a fixed period. It also includes deposits such as recurring, cumulative, annuity, reinvestment deposits and cash certificates.
(PTI)
