In a major step towards modernising India’s financial regulations, the Reserve Bank of India (RBI) has released a draft of new comprehensive banking rules covering 238 banks across the country. The RBI has invited public suggestions until November 10, 2025, before finalising the framework. Once approved, the new norms will come into effect from April 2026, ushering in a more transparent, accountable, and customer-friendly banking environment.
Key Highlights of the RBI Draft
The draft banking framework introduces several reforms designed to enhance consumer protection, streamline operations, and promote digital safety across India’s banking ecosystem.
1. Enhanced Accountability in Cyber Fraud Cases
Under the proposed regulations, banks will bear full responsibility for cyber frauds reported by customers within three days. This move aims to strengthen trust in digital banking systems. Delayed reports may lead to shared liability between the bank and the customer.
2. Locker Theft and Insurance
For the first time, banks will be held liable in cases of locker theft or damage, ensuring better safety measures and higher compensation for affected customers.
3. Faster Cheque Settlements
The RBI plans to reduce cheque clearing times, ensuring faster fund availability and smoother banking transactions for customers.
4. Simplified KYC Updates
The validity period for Know Your Customer (KYC) verification has been extended from five years to ten years, reducing compliance burdens for account holders.
5. Senior Citizen Banking Services
Banks will be required to provide mandatory doorstep services for customers aged 70 and above, improving accessibility and convenience for senior citizens.
6. Interest Rate Transparency
To ensure fairness, banks must clearly disclose how interest rates are calculated and updated, enabling customers to better understand fluctuations.
7. Streamlined Loan Processing
Loan approval and disbursal timelines will be strictly monitored, preventing unnecessary delays and enhancing operational efficiency.
8. Fair Home Loan Prepayment Policies
Customers prepaying their home loans will benefit from lower penalties and more transparent terms, fostering financial flexibility.
9. Digital and Prepaid Banking Security
The draft mandates banks to strengthen cybersecurity for prepaid wallets and online transactions, given the growing digital footprint of Indian banking.
10. Account and Credit Card Rules
The RBI aims to improve customer experience with new rules for account closures, credit card billing cycles, and dispute resolution timelines. Banks will be required to resolve such issues within fixed timeframes to prevent consumer distress.
Towards a Transparent and Customer-Centric Banking Future
This draft marks a significant evolution in India’s banking landscape. By inviting public participation, the RBI is fostering a culture of shared responsibility between regulators, banks, and citizens. The upcoming framework focuses on:
- Greater transparency in banking operations
- Consumer empowerment through faster grievance redressal
- Digital safety and inclusivity for all banking customers
The final regulations, once implemented in April 2026, are expected to redefine India’s financial ecosystem, striking a balance between innovation, security, and accessibility.
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