RBI Floats Proposal for Sub-7 Day Term Deposits: Awaits Feedback From Banks

RBI proposes sub-7-day term deposits, seeking bank feedback to introduce flexible short-term investment options for customers. The Reserve Bank of India (RBI) has approached banks for their suggestions on allowing fixed deposits (FDs) with tenures shorter than the current minimum of seven days. This initiative is reportedly driven by a slowdown in deposit growth and aims to offer greater flexibility for both retail and corporate customers who might have surplus funds for very brief periods, such as 3-4 days. The move could help banks attract more deposits and enhance liquidity management in the financial system.