The government has backtracked from a directive issued to state-run banks that put a cap on holdings of bulk deposits and certificates of deposit (CDs) saying the rules were not final, banking sources said on Thursday.
The move comes after several bankers expressed their unhappiness over the new measure.
The finance ministry on Monday asked state-run banks to limit their reliance on high-cost bulk deposits and CDs to 15 percent of all deposits, forcing lenders to find alternate sources of funding and drawing complaints from some, Reuters reported on Wednesday.
However, the government sent another letter to banks on Wednesday saying the matter was "under consideration" and final guidelines would be issued in "due course", three bankers and a finance ministry official said.
All sources declined to be identified because the matter is not public.