New Delhi, Jan 11 (IANS): Axis Bank, India's third-largest private sector bank, on Monday announced the removal of penalty on premature closure of all new retail term deposits booked on or after December 15, 2020 for a tenure of 2 years or more.

The objective of this customer-friendly feature is to inculcate and encourage retail customers to go for long-term savings without worrying about the sudden need for liquidity, the bank said in a statement.

The new feature will be applicable on all new fixed deposits and recurring deposits. For new deposits booked for a tenure above 2 years, there will be nil premature penalty if the entire deposit is prematurely withdrawn post 15 months of booking.

Praveen Bhatt, EVP - Retail Liabilities and Direct Banking Products, Axis Bank said: "... to stay ahead of the curve, we have waived off the penalty on all term deposits closed after 15 months. This new feature is in line with our objective to introduce customer centric benefits by offering flexibility and convenience, while also improving our book quality."

The new feature also offers no penalty on first withdrawal of up to 25 per cent of term deposit principal value.