‘We don’t enter price wars’: Capital SFB CEO on new RBI fixed deposit rules from October 1
RBI’s revised deposit rules, effective from October 1, are unlikely to force Capital Small Finance Bank into a rate war, as its deposit strategy is built around granular retail relationships rather than branch-specific FD pricing. The bank expects greater pricing transparency to make competition more disciplined across lenders.
- Aug 11, 2026,
- Updated Aug 11, 2026 8:15 AM IST
Small finance banks may not need to rely on branch-level FD rate competition to attract depositors under the Reserve Bank of India’s revised deposit interest rate framework, according to Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank. He said the new rules should bring greater transparency and discipline to deposit pricing rather than materially changing the bank’s retail-focused strategy.
The RBI’s revised framework will come into effect from October 1, 2026. Among the changes, banks will have to offer the same interest rate across branches for deposits of the same amount accepted on the same day. The move is aimed at improving transparency and ensuring customers are not offered different rates based simply on the branch they approach.
Retail deposits
Samra said the uniform pricing requirement is unlikely to materially affect Capital Small Finance Bank because the lender has not traditionally followed differentiated pricing across branches or geographies.
“We are fundamentally a retail franchise bank,” he said, pointing to the bank’s granular deposit base. Its average deposit ticket size is around ₹1.47 lakh, while CASA accounted for 36.7% of deposits as of June 30, 2026.
The bank’s deposit strategy is therefore focused on building long-term customer relationships rather than attracting deposits through frequent rate changes or branch-specific offers. Samra said Capital SFB also does not enter price wars to mobilise price-sensitive deposits.
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Greater transparency
At an industry level, Samra expects the revised framework to bring greater discipline to deposit pricing. More standardised and timely publication of rates should make it easier for customers to compare offerings across banks.
He said frequent tactical rate changes by banks in response to short-term liquidity requirements should become more transparent. This could encourage lenders to compete increasingly on the strength of their deposit franchise, service proposition and customer relationships rather than primarily through short-term pricing actions.
Samra also does not expect the framework to fundamentally change the competitive position of small finance banks versus larger commercial banks. According to him, competition in retail banking extends beyond the headline FD rate, with trust, accessibility, service quality and franchise strength remaining important differentiators.
Bulk deposit flexibility
The RBI has also provided banks greater flexibility in pricing bulk deposits under the liquidity coverage ratio framework. Samra said this gives banks an additional tool to manage funding and liquidity requirements, although its significance will vary according to each institution’s liability profile and business model.
For Capital Small Finance Bank, bulk deposits are not the primary driver of its funding strategy. Retail deposits accounted for 91.1% of deposits, while its liquidity coverage ratio stood above 180%, against the regulatory requirement of 100%, as of June 30, 2026.
The bank has focused on building a stable and granular retail deposit franchise through customer relationships and its branch network. Its branch network has expanded from 47 branches across five districts as a Local Area Bank to 216 branches as of Q1FY27.
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Daily rate disclosure
Samra also welcomed the revised disclosure requirements, including the requirement to publish bulk deposit rates every business day. He said timely and standardised disclosures should make pricing easier to compare and create a more transparent and orderly deposit market.
For depositors, the broader implication is that FD rates should become easier to compare across branches and banks. For small finance banks such as Capital SFB, the new framework may reinforce a strategy based on stable pricing, granular retail deposits and customer relationships rather than rate-led mobilisation.
MUST READ: ‘Want guaranteed returns... make a Bank FD’: PPFAS’ Rajeev Thakkar on equity volatility
Small finance banks may not need to rely on branch-level FD rate competition to attract depositors under the Reserve Bank of India’s revised deposit interest rate framework, according to Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank. He said the new rules should bring greater transparency and discipline to deposit pricing rather than materially changing the bank’s retail-focused strategy.
The RBI’s revised framework will come into effect from October 1, 2026. Among the changes, banks will have to offer the same interest rate across branches for deposits of the same amount accepted on the same day. The move is aimed at improving transparency and ensuring customers are not offered different rates based simply on the branch they approach.
Retail deposits
Samra said the uniform pricing requirement is unlikely to materially affect Capital Small Finance Bank because the lender has not traditionally followed differentiated pricing across branches or geographies.
“We are fundamentally a retail franchise bank,” he said, pointing to the bank’s granular deposit base. Its average deposit ticket size is around ₹1.47 lakh, while CASA accounted for 36.7% of deposits as of June 30, 2026.
The bank’s deposit strategy is therefore focused on building long-term customer relationships rather than attracting deposits through frequent rate changes or branch-specific offers. Samra said Capital SFB also does not enter price wars to mobilise price-sensitive deposits.
MUST READ: RBI Floating Rate Savings Bonds: Can NRIs invest in 8.05% government-backed bonds?
Greater transparency
At an industry level, Samra expects the revised framework to bring greater discipline to deposit pricing. More standardised and timely publication of rates should make it easier for customers to compare offerings across banks.
He said frequent tactical rate changes by banks in response to short-term liquidity requirements should become more transparent. This could encourage lenders to compete increasingly on the strength of their deposit franchise, service proposition and customer relationships rather than primarily through short-term pricing actions.
Samra also does not expect the framework to fundamentally change the competitive position of small finance banks versus larger commercial banks. According to him, competition in retail banking extends beyond the headline FD rate, with trust, accessibility, service quality and franchise strength remaining important differentiators.
Bulk deposit flexibility
The RBI has also provided banks greater flexibility in pricing bulk deposits under the liquidity coverage ratio framework. Samra said this gives banks an additional tool to manage funding and liquidity requirements, although its significance will vary according to each institution’s liability profile and business model.
For Capital Small Finance Bank, bulk deposits are not the primary driver of its funding strategy. Retail deposits accounted for 91.1% of deposits, while its liquidity coverage ratio stood above 180%, against the regulatory requirement of 100%, as of June 30, 2026.
The bank has focused on building a stable and granular retail deposit franchise through customer relationships and its branch network. Its branch network has expanded from 47 branches across five districts as a Local Area Bank to 216 branches as of Q1FY27.
ALSO READ: FD interest rates after RBI repo rate pause: Check Punjab & Sind Bank, PNB fixed deposit rates
Daily rate disclosure
Samra also welcomed the revised disclosure requirements, including the requirement to publish bulk deposit rates every business day. He said timely and standardised disclosures should make pricing easier to compare and create a more transparent and orderly deposit market.
For depositors, the broader implication is that FD rates should become easier to compare across branches and banks. For small finance banks such as Capital SFB, the new framework may reinforce a strategy based on stable pricing, granular retail deposits and customer relationships rather than rate-led mobilisation.
MUST READ: ‘Want guaranteed returns... make a Bank FD’: PPFAS’ Rajeev Thakkar on equity volatility