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 (CIC) 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.

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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For example, PNB allows premature withdrawal without penalty to customers under its PNB Sugam Fixed Deposit Scheme. Meanwhile, PNB has made a change in this popular FD scheme. According to the decision of Punjab National Bank (PNB), under the PNB Sugam Fixed Deposit Scheme, now customers will be able to invest up to a maximum of Rs 10 lakh only.

What is Sugam Fixed Deposit Scheme?

The bank said, “Account holders of existing Sugam Fixed Deposits who have mandated for auto-renewal of their FDs on maturity, will get the same interest rate as on FDs.” The bank further said, “However, due to the amendment in the scheme, the amount which is more than Rs 10 lakh at the time of maturity, will be renewed under a separate fixed deposit scheme of the bank.”

Who can invest?

• Individual (Singly or Jointly) or with Joint Account

• Minor who is 10 years of age or more

• Proprietorship/Partnership Firm, Commercial Organization, Company/Body Corporate

• Hindu Undivided Families (HUFs)

• Association, Club, Society, Trust or Religious/Charitable or Educational Institution

• municipality or panchayat, government or semi government body

• Illiterate and blind person can also open account

The minimum deposit amount for PNB Easy Deposit is Rs.10,000 and in multiples of Rs.1 thereafter.

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Tenure of PNB Easy Term Deposit

The tenure of an easy term deposit can be anything from 46 days to 120 months, such as 13 months, 14 months, 37 months and 16 days etc. for deposits up to Rs.10 crores.

Premature withdrawal of deposit

The biggest advantage of this scheme is that the depositor has the option of withdrawing any amount before maturity with a minimum withdrawal of Rs.1000. Whenever he needs money, he can withdraw the required amount without breaking the entire deposit amount. By doing this, the principal amount of the term deposit i.e. the value of the original amount will be reduced. No penalty will be levied on partial withdrawal of the deposit.

According to the PNB website, “If the amount bracket is changed due to part withdrawal of the deposit, the rate applicable for the new amount bracket of the deposit will be applicable from the date of such withdrawal.” The depositor can choose to receive interest on a monthly, quarterly or annual basis. If the balance period of the deposit with the bank is 6 months and above, interest will be paid compounded quarterly.

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