The Reserve Bank of India (RBI) has clarified that banks can offer differential interest rates on deposits, provided they adhere to strict transparency guidelines. RBI Governor Sanjay Malhotra stated that while differential rates are allowed for certain groups, such as senior citizens, they must be clearly communicated to all customers. This announcement comes in response to allegations against HDFC Bank, which reportedly routed Rs 45 crore in differential interest payments to the Maharashtra State Road Development Corporation by disguising these payments as marketing expenses. An investigative report suggested that HDFC Bank promised a 6.01% return on savings deposits to the state agency and, when unable to provide this through standard channels, allegedly devised a scheme to channel the payments through marketing vendors. HDFC Bank has strongly refuted these claims, citing its internal audit and control mechanisms as evidence of compliance with regulatory standards. The RBI's emphasis on transparency underscores the importance of ethical banking practices, especially in light of recent scrutiny of HDFC Bank's operations.