RBI issued revised deposit interest rate regulations, to be effective from October 2026

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RBI Interest Rate Amendment 2026

Highlights

RBI issued the final amendments to deposit interest rate directions on 30 July 2026, which will be effective from 1 October 2026.
The amendments give banks more flexibility in pricing rupee bulk deposits and ensure uniformity in interest rate disclosures.
Second Amendment Directions, 2026 have been notified for most banks, and Amendment Directions, 2026 for payment banks, making it easier for depositors to compare.

This article was translated from the original. Read the original version by our correspondent here.

Revised Directions and Implementation Timeline

According to the Reserve Bank of India, as per RBI's release dated 30 July 2026, the central bank has issued the final amended directions related to interest rates on deposits, which will be effective from 1 October 2026.

Prior to these amendments, RBI had released the draft "Reserve Bank of India (Interest Rate on Deposits) Amendment Directions, 2026" on 5 June 2026 and had invited comments from regulated entities, the general public, and other stakeholders until 20 June 2026. The aim of the draft was to provide banks with greater flexibility in pricing rupee bulk deposits, while also ensuring uniformity in deposit interest rate disclosures.

RBI stated that the feedback received was reviewed and necessary changes based on the responses have been incorporated into the final amended directions. A summary of the feedback received is provided in the Annex.

The final directions include separate amended instructions for commercial banks, small finance banks, regional rural banks, payment banks, local area banks, and urban co-operative banks. For most of these, the Second Amendment Directions, 2026 have been issued, while for payment banks, the Amendment Directions, 2026 have been notified.

Impact on the Banking Sector and Depositors

This move could make deposit mobilization strategies more flexible for the banking sector, especially for institutions seeking to offer competitive rates on large rupee deposits. At the same time, uniformity in interest rate disclosures could make it clearer for depositors to compare offerings across different banks.

From a regulatory perspective, this amendment reflects RBI's balance between allowing banks pricing leeway while maintaining transparency standards. Once implemented from 1 October 2026, these rules may impact the deposit product structure and rate disclosure processes across various bank categories.

In our earlier report, RBI's measures to boost foreign capital inflows—especially through the FCNR(B) swap window, ECB, and OFCB routes—were discussed, along with the resulting dollar inflows into banks and the continued pressure on the rupee. That article also highlighted that high global dollar rates, oil price uncertainty, and geopolitical tensions could continue to pose risks to the currency and balance of payments situation.

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