Reserve Bank of India
Central Office
Department Of Banking Operations & Development
Centre - 1, World Trade Centre
Cuffe Parade, Colaba, Mumbai - 400 005

October 29, 1999
Kartika 07, 1921(Saka)

In exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949 and in partial modification of the Directive DBOD No.Dir.BC.151/C.347-85 dated December 27, 1985, as amended from time to time, the Reserve Bank of India, being satisfied that it is necessary and expedient in the public interest so to do, hereby directs that clause (a) of paragraph 11 of the said Directive shall be substituted by the following with immediate effect:

"When an advance is granted against a term deposit and the deposit stands in the name of

1. the borrower either singly or jointly,
2. one of the partners of a partnership firm and the advance is made to the said firm,
3. the proprietor of a proprietary concern and the advance is made to such a concern,
4. a ward whose guardian is competent to borrow on behalf of the ward and where the advance is made to the guardian of the ward in such capacity,

the banks shall be free to charge interest rates without reference to the Prime Lending Rate."

2. The other provisions contained in paragraph 11 shall remain unchanged.

(G.P. Muniappan)
Executive Director