The regional office of the central bank has broken the silence on the circular issued by the Reserve Bank of India (RBI) on July 2 regarding auto renewal of fixed deposits (FDs). RBI clarified that if FD holders want to avoid going to the bank, then they must opt for auto-renewal (auto-renewal) while getting the FD itself. In the event of not choosing this option, only the interest received on the savings account on the FD will be available as soon as the term is completed. Along with this, RBI has clarified that the board of any bank can take a decision in this regard, on which RBI will not object.
The RBI had shocked lakhs of bank customers by issuing a circular on July 2 during the Corona period. Auto renewal of FDs was stopped, along with this, banks were ordered to pay interest on FDs at par with ordinary savings accounts after the expiry of time. Due to this decision, the elderly have suffered a lot, because they get a large amount of FD as their social security, use the money received from it for their treatment and other works.
At the same time, during the Corona period, they would have to go to the bank again and again, which would prove to be dangerous in terms of infection. RBI did not consider it appropriate to clarify them with immediate effect. The doubts of the people were raised prominently by Dainik Jagran and asked direct questions to RBI. RBI answered those questions.
Know what were people’s questions and RBI’s answer to them.
If an FD holder’s FD has expired on 30th June, what will he have to do?
Answer: Banks can pay compound interest for the overdue period of the fixed deposit at their own level by passing it to the Board of Directors, if they so desire. Banks should inform their customers about the terms and conditions at the time of FD itself.
Will the customer have to visit his/her respective bank for FD renewal?
Answer: According to the rules, the bank can auto-renew. If the FD holder does not opt for auto renewal while making the FD, then he will have to go to the bank.
When will the circular regarding FD auto renewal be considered effective?
Answer: The order will be considered effective from July 2.
When the government is appealing to everyone to stay at home due to the possible threat of a third wave of corona, especially the elderly are being asked to stay at home, then this order will not create new dangers?
Answer: There is no impact on the need to visit the bank branch directly. Customers can give instructions for auto renewal of their FDs as per the extant guidelines of their banks.
Till now, after the expiry of the term of FD in banks, everyone would have been aware that the renewal of FD will be automatic. One did not have to go to the bank and the bank officials also did not have to waste much time.
Answer: Any existing order for auto renewal of Term Deposits issued by the customer shall remain in force as till now. If the customer has not opted for auto renewal of FD, then he will have to visit the bank for renewal.