The Reserve Bank of India (RBI) has announced updated guidelines for fixed deposits held with Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs). These changes introduce new provisions for early withdrawal and notification timelines. Here's a summary of the key changes:
- Early Withdrawal for Small Deposits Deposits valued at less than ₹10,000 may be withdrawn interest-free within three months of acceptance if requested by the depositor.
- Partial Withdrawal for Larger Deposits For deposits exceeding ₹10,000, depositors may request early withdrawal of up to 50% of the principal or ₹5 lakh (whichever is lower) without interest. This provision applies only if the request is made before the three-month period from the date of deposit acceptance.
- Full Withdrawal for Critical Illness In cases of critical illness, depositors may request 100% reimbursement of the principal, interest-free, even before the three-month period from the date of deposit acceptance.
- Definition of Emergencies Emergencies include medical crises or costs arising from natural disasters or calamities officially declared by the government.
- Applicability to Existing Contracts The above provisions will also apply to current deposit contracts that previously prohibited early withdrawal before three months from the deposit date.
- Notification of Maturity Details Previously, NBFCs were required to notify depositors about maturity details at least two months before the maturity date. Under the revised guidelines, this notification period has been reduced to 14 days.
