Creates a transparent online system for banks to match rates, benefiting the city; traditionally, BMC would call bank officials to request interest rate quotes, which were then submitted via email or letter
By March investment is expected to reach Rs 54K crore. Pic/Shadab Khan
By adopting a transparent and competitive system for fixed deposits, the Brihanmumbai Municipal Corporation (BMC) is set to earn Rs 1000 crore more in interest compared to the last financial year. Traditionally, BMC would call bank officials to request interest rate quotes, which were then submitted via email or letter. However, since July 2024, the civic body’s finance department has introduced an online system.
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Explaining how it works, a senior official said, “In the new system, we raise our demand in the morning, and banks can submit their interest rate quotes until 3 pm the same day. Each bank can see its competitors' quotes and revise their rates, creating a competitive environment.” While the deadline is set at 3 pm, banks sometimes request additional time. “If a bank requests an extension, we grant them an extra hour. A higher interest rate benefits BMC, so we accommodate banks, provided they update their quotes online,” the official added.
According to BMC’s finance department, in 2023-24, the civic body earned R3891.15 crore in interest from Rs 54,890.61 crore in fixed deposits. Between April 2024 and January 2025, it invested Rs 45,034.66 crore and earned Rs 4080.84 crore in interest. By March 2025, the investment is expected to reach Rs 54,178.27 crore, with projected interest earnings of Rs 4851.12 crore.
“An additional Rs 1000 crore is a substantial amount—it could finance the construction of two peripheral hospitals,” the official said. Civic chief Bhushan Gagrani added, “With the new online system, we are earning an average of half a per cent more interest than before. This is a significant boost for BMC.”
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