Banking, Your Way: RBI’s Draft Norms Make Digital Channels Optional and Raise the Fraud Shield

Key highlights

 

The Reserve Bank of India (RBI) released draft guidelines on July 21, 2025, outlining a sweeping overhaul of digital banking regulations. The focus: strengthening customer autonomy, expanding fraud safeguards, and enhancing transparency for millions of bank users nationwide.

 

Customer Choice Takes Center Stage

 

Digital banking will no longer be a prerequisite for related services—customers cannot be compelled to opt in for internet or mobile banking to receive other products like debit cards. Choosing digital channels remains entirely voluntary, with banks expressly prohibited from forced bundling of such services.

 

Customers must now give explicit, documented consent before any digital banking service is activated. Clear, multilingual disclosures—covering all terms, charges, grievance processes, and liabilities—are required to ensure true informed choice.

 

Tougher Fraud Protection and Security Norms

 

Banks must implement risk-based transaction monitoring, using analytics to detect irregular activity. Outlier or suspicious transactions will trigger real-time customer confirmation, limiting exposure to digital fraud.

 

Comprehensive cyber audits are mandatory before a bank can launch full-scale digital transactions. Eligibility hinges on robust IT infrastructure, core banking integration, and sound cyber security records—all verified by CERT-In empaneled auditors.

 

Transaction and velocity limits, along with network-independent mobile access, form part of the safety framework. Digital banking services must be accessible across all network providers, preventing accidental exclusion of customers with limited connectivity.

 

Ban on Third-Party Product Promotions

 

Banks are banned from displaying or promoting third-party products—including offerings from their own subsidiaries or promoter group companies—on digital platforms, unless the RBI expressly permits it.

 

Regulatory Uniformity and Next Steps

 

All commercial and cooperative banks will come under a single, modernized set of digital banking guidelines, replacing over 15 legacy circulars.

 

The RBI has called for public feedback on these draft norms through its Connect 2 Regulate platform, with finalization expected later this year.

 

Sources: Economic Times BFSI, Deccan Chronicle