RBI has issued instructions to all banks that premature withdrawal facility should be provided on FDs up to Rs 1 crore. Apart from this, RBI has also instructed banks to crack down on recovery agents.
New Delhi. If you have a big FD then there is good news for you. RBI has asked to make arrangements for premature withdrawal of FDs worth more than Rs 1 crore. RBI issued instructions to banks on Thursday saying that they will have to provide premature withdrawal facility on all FDs up to Rs 1 crore. Currently this limit is up to Rs 15 lakh.
According to the Reserve Bank, after review, it has been decided that non-withdrawable FD can be increased from Rs 15 lakh to Rs 1 crore. Along with instructions to increase the limit of pre-maturity withdrawal, RBI has told the banks that they can also change the interest rates accordingly. These instructions have come into effect with immediate effect on all commercial banks and cooperative banks. Apart from this, RBI has increased the ‘bulk deposit’ limit for Regional Rural Banks (RRB) from Rs 15 lakh to more than Rs 1 crore.
Instructions to credit companies
RBI has issued instructions to Credit Information Companies (CICs) saying that the customer will have to pay Rs 100 every day for the delay in correction of credit information. Credit institutions (CIs) and credit information companies (CICs) have been given 6 months time to implement the new system.
Agents will be controlled
The Reserve Bank of India (RBI) on Thursday proposed to tighten the standards for recovery of outstanding loans. Under this, financial institutions and their recovery agents cannot call borrowers before 8 am and after 7 pm. RBI’s ‘Draft Instructions on Risk Management and Code of Conduct’ states that regulated entities (REs) like banks and NBFCs should not outsource key management functions.
These functions also include policy formulation and determination of compliance with KYC norms and approval of loans. RBI said that REs should ensure that their responsibilities towards customers are not diminished by outsourcing arrangements. According to the draft, banks and non-banking financial companies (NBFCs) should frame a code of conduct for direct selling agents (DSAs), direct marketing agents (DMAs) and collection agents.
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