RBI New Rules: Banks will be required to send SMS or email alerts for all financial and non-financial transactions. Furthermore, where both RBI and a payment system operator’s regulations apply, stricter rules will apply.
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RBI New Rules: The Reserve Bank of India (RBI) has issued guidelines for providing banking services through digital channels, following industry feedback on a draft released in July. These rules will come into effect from January 1, 2026. They will tighten banks’ approval processes, increase compliance and customer protection requirements, and strengthen disclosure and grievance redressal standards.
Why were the regulations needed?
These regulations come in response to growing complaints that banks were pressuring customers to download mobile apps to avail internet banking services or activate cards. These regulations come at a time when the regulator is focusing on customer experience and cracking down on banks to prevent bundling of services.
What are digital banking channels?
Digital banking channels are the channels through which banks offer services over internet banking, mobile banking, and other electronic platforms. They include both full-fledged transactional banking services (such as loans, fund transfers) and view-only services (such as balance checks, statement downloads).
Who will the new rules apply to?
The industry had demanded that these guidelines be extended to non-banking financial companies (NBFCs) and fintechs, but the RBI has limited them to various categories of banks. However, if banks outsource services to third parties or fintechs, they must ensure that those services comply with existing regulations.
What approvals are required to offer digital banking services?
Any bank with a Core Banking Solution (CBS) and public IT infrastructure capable of handling Internet Protocol version 6 (IPv6) traffic can offer “view-only” digital banking services, but launching transactional digital banking will require prior RBI approval.
Banks will be required to meet several additional conditions, such as adequate financial and technical capabilities, a strong record of cybersecurity compliance, and robust internal controls.
What are the rules for banks?
Under this framework, explicit, documented customer consent is mandatory for registration or cancellation of digital banking services. Once a customer is logged in, banks cannot display third-party products or services unless specifically permitted.
Banks will be required to send SMS or email alerts for all financial and non-financial transactions. Furthermore, where regulations from both the RBI and a payment system operator apply, stricter rules will apply.
How will the new rules help users?
Customers will not be required to choose digital channels to access other services, such as debit cards. They can choose any combination of digital-banking services, and banks cannot bundle them.
For registration, banks will be required to present terms and conditions in clear, simple language, including fees, help desk information, and complaint redressal channels. These measures are expected to improve security and clarity for users of digital-banking services.
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