The Reserve Bank of India (RBI) on November 28, 2025, released the Reserve Bank of India (Payments Banks – Interest Rate on Deposits) Directions, 2025 for public comments. Issued under Section 35A of the Banking Regulation Act, 1949, these directions aim to establish a comprehensive regulatory framework governing how Payments Banks determine and administer interest rates on deposits. The directions will come into effect once placed on the RBI’s official website.
The prescribes that Payments Banks must formulate a Board-approved policy on deposit interest rates ensuring uniformity, transparency, and fairness across all customers. Interest rates must be non-discriminatory and consistent with the rates published in advance. While no interest is payable on current accounts, deposits held in the name of deceased customers shall earn savings deposit interest until settlement. For savings deposits, interest will be calculated on a daily product basis, with uniform rates up to ₹1 lakh and differential rates permitted for balances exceeding that amount.
The guidelines also allow an additional 1% interest for bank staff and certain eligible associations and stipulate that savings deposit interest be credited quarterly or at shorter intervals. Further, Payments Banks are prohibited from offering incentives, commissions, or prizes for deposit mobilization, and from opening savings accounts for government bodies or political parties, except those listed under Schedule-I. The directions seek to ensure ethical deposit practices, depositor protection, and operational transparency across all Payments Banks.
These Directions shall come into force with immediate effect.
[Notification No. RBI/DOR/2025-26/212 DOR.SOG(SPE).REC.131/13.03.00/ 2025-26]
