• The depositor if he does not want to renew the deposit can ask for it to be paid to him
either by a cheque/ draft or credited to an account he has. This instruction would normally
be in the account opening instructions.
• If the depositor does not renew or claim the deposit on maturity, the deposit will be
designated as an overdue deposit in the books of the bank.
• The bank cannot close the deposit and repay the depositor if the depositor does not make
• If the deposit matures on a Sunday/ holiday/ non working day, the bank should pay
interest at the originally contracted rate on the deposit amount for the Sunday/ holiday/
non business day. The deposit would be paid on the succeeding working day.
Renewal of overdue deposits
• Banks may renew deposits at an interest rate prevailing on the date of maturity provided
the depositor approaches the bank within 14 days from the date of maturity of the deposit.
• If the application for renewal is made after 14 days the rate of interest should be the rate
prevailing on the date of renewal of deposit.
• Banks are free to determine the rate of interest between the date of maturity and the date
• The policy on all aspects of renewal of over due interest are to be decided by the
respective boards of banks. This policy must be non discretionary and non discriminatory.
Advance on Fixed Deposits
• Banks may grant loans on the security of the fixed deposit.
• Banks should maintain a reasonable margin on any advance or facility given against the
security of a term deposit.
• Banks are free to charge a rate of interest without reference to its prime lending rate
(BPLR). If the term deposit is withdrawn before completion of the prescribed minimum
maturity period it should not be treated as an advance against the term deposit and interest
should be charged at the rates prescribed by the RBI.
• On advances given on the security of fixed deposits to third parties upto Rs. 2 lakhs
banks can charge interest without reference to its BPLR. If it