The Reserve Bank of India has rolled out a wide set of measures to make banking safer for customers, strengthen digital payment security and reduce mis-selling of financial products. The announcements came along with the latest monetary policy decision, in which the central bank kept interest rates unchanged.
RBI Governor Sanjay Malhotra said the steps are aimed at improving trust in the financial system while making credit and financial services more accessible.
The RBI plans to tighten rules to better protect customers, especially in areas where complaints have been rising.
The RBI will issue draft guidelines covering:
Mis-selling of financial products
Recovery of loans and the role of recovery agents
Limiting customer liability in unauthorised electronic banking transactions
In addition, the RBI has proposed a framework to compensate customers up to ₹25,000 for losses arising from small-value fraudulent transactions.
To improve digital payment safety, the RBI will release a discussion paper. Proposed ideas include:
Delayed credit of funds in certain cases to prevent fraud
Extra authentication for vulnerable users, such as senior citizens
To reduce compliance burden, the RBI proposed easing norms for certain non-banking financial companies (NBFCs).
NBFCs with no public funds, no customer interface and assets below ₹1,000 crore may be exempt from registration
Some NBFCs may no longer need prior approval to open more than 1,000 branches
The RBI has reviewed key financial inclusion schemes and will soon issue revised draft guidelines for:
Lead Bank Scheme (LBS)
Kisan Credit Card (KCC) scheme
Business Correspondent (BC) model
A unified reporting portal will also be launched to improve data management under the Lead Bank Scheme.
Other inclusion-focused steps include:
Raising the limit for collateral-free loans to MSMEs from ₹10 lakh to ₹20 lakh
Allowing banks to lend to REITs, with safeguards, to support real estate financing
To strengthen urban cooperative banks (UCBs), the RBI announced several relaxations:
Higher limits for unsecured loans
Increased loan limits for nominal members
Removal of tenor and moratorium restrictions on housing loans by Tier III and Tier IV UCBs
The RBI will also launch Mission-SAKSHAM (Sahakari Bank Kshamta Nirman), a large-scale training programme aimed at improving managerial and technical skills. Over 1.4 lakh people from UCBs are expected to benefit.
The RBI announced several steps to deepen financial markets:
Removal of the ₹2.5 trillion limit under the Voluntary Retention Route (VRR) for foreign investors
Proposal for a regulatory framework for derivatives on corporate bond indices and total return swaps on corporate bonds, in line with the Union Budget 2026–27
Draft revised guidelines will also be issued for:
Authorised Dealer banks
Stand-alone primary dealers, allowing more flexibility in foreign exchange transactions
The RBI has also finalised draft rules on External Commercial Borrowings, which will be notified soon.
The RBI will observe Financial Literacy Week starting February 9. The theme for 2026 is “KYC--Your First Step to Safe Banking”.
Governor Malhotra urged banks to actively take part in the awareness drive, especially as the central bank continues its re-KYC campaign across the country.
