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RBI Implements Third Amendment for Small Finance Banks on Interest Rates
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RBI Implements Third Amendment for Small Finance Banks on Interest Rates

September 1, 2026

The Reserve Bank of India has amended the interest rate guidelines for Small Finance Banks, removing the ceiling on fresh deposits to enhance competitiveness.

RBI Implements Third Amendment for Small Finance Banks on Interest Rates

On August 25, 2026, the Reserve Bank of India (RBI) announced the Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions, 2026. This amendment revises previous directives from 2025 regarding interest rates for new deposits.

The significant change introduced is the temporary withdrawal of the interest rate ceiling on new deposits, a move aimed at increasing competitive dynamics among Small Finance Banks. The amendment aligns with previous updates as of June 17, 2026, to stay current with financial market trends.

Banking lawyers should inform clients operating in the small finance sector about the implications of these amendments, particularly regarding their potential to reshape deposit offerings in a rapidly changing financial environment.

Citations

  • Reserve Bank of India (Small Finance Banks – Interest Rate on Deposits) Third Amendment Directions, 2026
Practice Areas:banking

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