The Reserve Bank of India (RBI) raised the threshold limit for non-callable deposits to Rs 1 crore from Rs 15 lakh in an effort to give depositors more flexibility.

The RBI stated that following a review, it was determined to raise the minimum amount required to offer non-callable term deposits (TDs) from Rupees fifteen lakh to Rupees one crore.

This implies that an early withdrawal option will be available for all domestic term deposits taken from people for sums less than Rs 1 crore, according to the RBI.

According to the RBI, banks are permitted to charge varied interest rates on fixed deposits depending on the duration and size of the deposit as well as the non-callability of the deposit (i.e., the absence of a premature withdrawal option).

Non-callable deposits usually have higher interest rates offered by banks.

Ordinary Non-Resident (NRO) and Non-Resident (External) Rupee (NRE) deposits are eligible for the callability feature.

The RBI changed the definition of bulk deposits in 2019 to include deposits from a single customer of more than Rs 2 crore, up from Rs 1 crore previously. The decision to raise the callable deposit level was made, according to bankers, in order to bring it into compliance with the revised definition of bulk deposits.

These new regulations, which apply to both commercial and cooperative banks, are effective right