The Delhi High Court dismissed NatWest Markets PLC’s appeal over interest on a ₹5.89 crore fixed deposit connected to an arbitration dispute. The Court held that NatWest had not shown that comparable deposits were all reduced to 3.5%, and the record did not establish that the affected parties were told the deposit had matured and needed renewal. The ruling concerns this court-secured deposit and its evidence; it is not a general ban on banks changing rates on ordinary fixed deposits.
What happened to the ₹5.89 crore deposit?
In a dispute between Hero Exports and Tiffins Barrytes, Hero Exports sought interim protection under Section 9 of the Arbitration and Conciliation Act, 1996. The court directed that funds be secured, and ₹5.89 crore in Tiffins Barrytes’ account was placed with the bank in a fixed deposit carrying the maximum rate of interest. The judgment traces the bank’s identity from ABN Amro Bank N.V. to Royal Bank of Scotland and then NatWest Markets PLC.
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The Delhi High Court’s 2026 judgment records rates of 7.75%, 8.25% and 7.75% through 30 January 2018, followed by 3.5%. In May 2019, a Single Judge directed that interest for the later period be calculated using the average of the preceding three rates. NatWest appealed that direction.
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NatWest relied on clauses in Reserve Bank of India circulars that let banks determine domestic term-deposit rates and address how proceeds of matured fixed deposits are treated when they remain unpaid. Its position invoked non-renewal and the treatment of a matured deposit.
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The High Court considered the distinction between an FDR that has matured and whose proceeds remain unpaid, and this deposit, which had been placed under court directions. It concluded that clause 3.4 did not, on the record in this case, establish NatWest’s entitlement to pay 3.5%.
Why did the High Court reject the rate reduction?
Comparable deposits were not shown to have received the same rate
The Court read clause 3.3 as allowing banks to set term-deposit rates subject to a non-discrimination condition: comparable deposits accepted on the same date and for the same maturity should not be treated differently. NatWest did not substantiate that all similar FDRs had been reduced to 3.5%. Justice Avneesh Jhingan, writing for the Division Bench, said: “The appellant neither before the learned Single Judge nor in the present appeal has substantiated the fact that the ROI for all the similar FDR was reduced to 3.5%.”
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The record did not establish notice of maturity and renewal
The Court also found no evidence that Hero Exports or Tiffins Barrytes had been informed that the FDR had matured and needed renewal. It noted that the bank had applied to the arbitrator in 2017 to transfer the funds because it was winding down, but that application did not disclose the rate reduction and remained pending. The Court stated: “There is nothing on record to establish that the appellant informed the affected parties i.e. Hero Exports and Tiffins Barrytes about the maturity of the FDR and that it was required to be renewed.”
What did the appeal decision leave in place?
On 23 September 2026, a Delhi High Court Division Bench comprising Justices Avneesh Jhingan and Shail Jain dismissed NatWest’s appeal. It found no factual or legal error in the Single Judge’s directions, leaving in place the direction to use the average of the preceding three rates for the period after 30 January 2018.
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What the ruling does—and does not—say
The decision applies the cited RBI clauses to the evidence and court orders in this particular dispute. It does not establish that banks are categorically prohibited from changing rates on ordinary customer FDs. The relevant findings here were that NatWest did not substantiate equal treatment of comparable deposits at 3.5%, and the record did not show notice to the parties about maturity and renewal.
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