The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Local Area Banks – Interest Rate on Deposits) Directions, 2025.
The following has been stated: -
•The RBI (Local Area Banks – Interest Rate on Deposits) Directions, 2025, provide a framework for LABs to uniformly determine and disclose interest rates on domestic, NRE/NRO, and FCNR(B) deposits.
•They mandate board-approved policies on interest calculation, premature withdrawal penalties, and additional interest for staff and senior citizens.
•The Directions prohibit unethical deposit mobilization practices and specify exemptions for certain institutional and government accounts.
•They also repeal previous guidelines while ensuring continuity, allowing RBI to issue clarifications for consistent interpretation and compliance.
· These Directions shall come into effect on November 28, 2025.
[Notification No.:RBI/DOR/2025-26/228 DOR.SOG(SPE).REC.147/13.03.00/ 2025-26]
