RBI Issues Seven New Master Directions to Enhance Digital Banking Channels for Regulated Entities

The Reserve Bank of India (RBI) has introduced seven new master directions concerning digital banking channels for regulated entities. This initiative aims to enhance clarity and accessibility while reducing compliance burdens for these entities. The move aligns with the broader goal of improving the ease of doing business in India.

Following consultations with stakeholders, the RBI has consolidated 244 master directions. These encompass instructions managed by the Department of Regulation, organised across various regulatory areas. The directions have been issued separately for 11 types of regulated entities.

Digital Banking Channels Authorisation

The seven new master directions specifically address digital banking channels authorisation for different types of regulated entities. These include commercial banks, small finance banks, payment banks, local area banks, regional rural banks, urban co-operative banks, and rural co-operative banks.

These new guidelines will come into effect on January 1, 2026. They cover policies and procedures, eligibility criteria for services, technological guidelines, compliance requirements, customer conduct standards, and exemptions.

Comprehensive Policies Requirement

According to the new directions, all regulated entities must establish comprehensive policies for digital banking channels. These policies should consider statutory and regulatory requirements, including liquidity management and operational risks in digital banking scenarios.

Digital banking channels refer to methods provided by banks through internet banking, mobile banking, or other digital means. These channels allow customers to execute financial transactions using electronic devices with significant process automation or interfacing with other institutions.

The RBI's initiative to issue these master directions is part of a larger effort to streamline regulations and make them more accessible. By consolidating instructions into cohesive documents, the RBI aims to simplify compliance for regulated entities.

This comprehensive approach ensures that all aspects of digital banking are covered under the new guidelines. It reflects the RBI's commitment to fostering a more efficient and transparent banking environment in India.

With inputs from PTI