Can a Bank Cut Your Fixed Deposit Interest on Its Own? Delhi High Court Rules on a Rs 5.89 Crore FDR

What happened?

The Delhi High Court has ruled on a dispute over interest on a fixed deposit. A fixed deposit receipt is called an FDR. This is according to Bar & Bench, Business Standard and LiveLaw Biz.

The case is NatWest Markets PLC v. Hero Exports and another. A Division Bench of Justice Avneesh Jhingan and Justice Shail Jain decided it, as reported on 6 October 2026.

The story starts in 2008. In a business dispute between two companies, the High Court ordered that Rs 5.89 crore be kept safe.

The money sat in an FDR with a bank, now called NatWest. The court said it should earn the maximum interest.

Why did the interest drop?

As reported, the FDR earned 7.75%, then 8.25%, then 7.75% until 30 January 2018. After that, the bank cut the rate to 3.5%.

A single judge ordered the bank to pay more. The bank then appealed to a Division Bench.

The bank said a Reserve Bank of India (RBI) circular lets banks set their own deposit rates. The bench agreed that banks have this freedom. But it said the freedom has a limit: banks cannot treat similar deposits differently.

What did the court say?

According to the reports, the bench found three problems.

First, the bank gave no material to show that it cut the rate to 3.5% for all similar deposits. Second, it did not show that it told the depositors the FDR had matured or that the rate would fall. Third, a court-ordered deposit needs extra care, because the money is kept to protect someone’s claim.

The court dismissed the appeal. Interest from 30 January 2018 is to be worked out at the average of the rates of the three years before that date, as reported. The bank must also deposit the money with the court’s Registrar General.

Does this help an ordinary depositor?

Not directly. This ruling is about a deposit held under a court order. It does not say every FD rate cut is wrong.

But the reasoning is useful. A bank must treat similar deposits the same way. It must also keep the depositor informed.

These ideas can help any person who feels a bank changed the terms without telling them. A normal FD has its terms on the receipt. When it matures, a new rate may apply on renewal.

So always read what your bank has told you in writing.

What happens next?

The order can be challenged in the Supreme Court. This depends on the bank. We do not know if it will do so.

For any bank-deposit dispute, the usual path is below.

Rights of a depositor

A depositor has the right to know the terms of the deposit and any change in them. A depositor can ask the bank for a written reason. A depositor can also approach a court if a deposit is held under a court order.