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RBI instructs banks to pay 8% compensation on delayed interest payments

Reserve Bank of India (RBI) has directed banks to pay a compensation of 8% on delayed interest payments on relief bonds. A circular read, “an agency bank should compensate an investor in relief/savings bonds for financial loss due to late receipt/delayed credit of interest warrants/maturity value, at a fixed rate of 8 per cent per annum.”

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Reserve Bank of India

This clearly means that bank must be more prompt in crediting the interest amounts to its customers to avoid high compensation for the ‘Supreme’ bank. Previously, RBI had asked banks to compensate the delay in payments at savings bank account rate irrespective of the amount.

To add some info about relief/savings bonds, these are issued in the form of stock certificate and bond Ledger Account (BLA) by the RBI. All banks including public sector and private banks, you have noticed this right? Well, this is good news to customers however.

Sources: 1, 2

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