Updates

The Reserve Bank through its public awareness initiatives, has been encouraging members of public to activate their inoperative accounts and claim their unclaimed deposits from the banks. In this endeavour, to encourage the banks to actively pursue customers/ depositors for re-activation of their inoperative accounts and return of their unclaimed amounts lying with Depositor Education and Awareness (DEA) Fund, the Reserve Bank of India today announced a ‘Scheme for Facilitating Accelerated Payout – Inoperative Accounts and Unclaimed Deposits’. The Scheme aims to reduce both the stock of existing unclaimed deposits and fresh accretion of flows to the DEA Fund. It will run for a period of one year, viz., October 01, 2025 to September 30, 2026.

The Reserve Bank of India (RBI) has issued seven Directions/Circulars, proposing to amend some of the extant Directions/Circulars applicable to banks and other regulated entities. While three of these amendments come into effect immediately (Part A), public comments are solicited on
the other four (Part B).

A. Directions which come into force from October 01, 2025
 Reserve Bank of India (Interest Rate on Advances) (Amendment Directions), 2025
 Reserve Bank of India (Lending Against Gold and Silver Collateral) – (1st Amendment) Directions, 2025
 Reserve Bank of India (Basel III Capital Regulations – Perpetual
Debt Instruments (PDI) in Additional Tier 1 Capital – Eligible Limit for Instruments Denominated in Foreign Currency/Rupee Denominated Bonds Overseas) Directions, 2025

B. Directions/Circulars which are being issued as drafts for public feedback
 Reserve Bank of India (Gold Metal Loans) Directions, 2025
 Large Exposures Framework (Amendment Circular), 2025; and Guidelines on Management of Intragroup Transactions and Exposures (Amendment Circular), 2025
 Draft Reserve Bank of India (Credit Information Reporting) (1st Amendment) Directions, 2025

The Reserve Bank of India (RBI) has issued a comprehensive regulatory framework titled the Reserve Bank of India (Co-Lending Arrangements) Directions, 2025, aimed at expanding and streamlining co-lending arrangements (CLAs) between banks, Non-Banking Financial Companies (NBFCs), Housing Finance Companies (HFCs), and certain other regulated entities. These guidelines will come into effect from January 1, 2026, though entities may voluntarily adopt them earlier.

The RBI says the move is intended to broaden the scope of co-lending beyond its earlier focus on priority sector lending, provide regulatory clarity, and address prudential as well as customer protection concerns.

RBI has issued updated Master Directions for Electronic Trading Platforms (ETPs), effective June 16, 2025, replacing the 2018 framework. These directions strengthen authorization, governance, risk management, and reporting norms for entities operating non-exchange trading platforms in India.

Premji Invest is set to acquire a 20% stake in a new-age NBFC being launched by former ICICI Bank executive Bijith Bhaskar. The venture will focus on secured, tech-backed MSME lending, aiming to raise ₹500 crore.

Key Amendments Summary:

1. Low-risk individuals get more time – Transactions may continue, with KYC due within one year of the due date or by June 30, 2026—whichever is later. Accounts remain under regular monitoring.
2. Empowerment of Business Correspondents (BCs) – Authorized BCs can collect KYC self-declarations, via biometrics or in person, and submit them electronically or physically to banks. Banks must update records and notify customers once processed
3. Mandatory advance notices & reminders – Regulated Entities (REs) must issue at least three advance notices (one via letter) before KYC expiry, and three reminders (one via letter) if due date passes. Communication should explain instructions, escalation mechanisms, and possible consequences; implementation deadline is Jan 1, 2026
   Why this matters:
   • Simplifies KYC for low-risk customers and those in underserved regions
   • Strengthens financial inclusion by leveraging BC networks Reinforces compliance by ensuring proactive communication.
   For details, please refer to the Master Direction attached

The Reserve Bank of India (RBI) issued the “Digital Lending Directions, 2025” on May 8, 2025, to regulate digital lending practices. These guidelines aim to enhance transparency, protect borrowers, and ensure ethical conduct in digital lending operations.

The Reserve Bank of India’s notification outlines the issuance of power and other bonds totaling ₹12,847 crore by 26 State Governments under a One-Time Settlement Scheme aimed at addressing State Electricity Boards’ dues. This measure significantly impacted the fiscal deficit, with power sector-related expenditures accounting for 29.2% of the Gross Fiscal Deficit in the revised estimates for 2003-04.

The Reserve Bank of India’s Master Circular (dated July 1, 2009) provides guidelines for detecting, reporting, and managing frauds in commercial banks and financial institutions. Key provisions include:

• Mandatory reporting of frauds of ₹1 lakh and above to the RBI.
• Detailed reporting for frauds over ₹1 crore to RBI, CBI, or other authorities.
• Quarterly and annual fraud reports are required.
• Banks must assess staff accountability and strengthen internal controls.
• A special committee should monitor major frauds (₹1 crore+).

The circular aims to enhance transparency and strengthen fraud prevention in the banking sector.

Starting May 1, 2025, the Reserve Bank of India (RBI) will require all regulated entities—including banks, NBFCs, and financial institutions—to submit applications for regulatory authorizations, licenses, and approvals exclusively through its PRAVAAH portal. Launched in May 2024, PRAVAAH (Platform for Regulatory Application, Validation and Authorization) is a centralized, web-based system designed to digitize and streamline communication between the RBI and supervised entities. The portal has processed around 4,000 applications so far and offers features such as real-time tracking, downloadable forms, and user support tools. The move aims to improve efficiency, reduce manual processes, and ensure standardization across the financial sector.

The Master Direction – Core Investment Companies (Reserve Bank) Directions, 2016 (updated as on May 05, 2025) provides a regulatory framework for Core Investment Companies (CICs) in India. It outlines guidelines on registration requirements, capital adequacy, corporate governance, and permissible investments to ensure financial stability and effective supervision of CICs.

The Master Directions – Mortgage Guarantee Companies (Reserve Bank) Directions, 2016 (updated as on May 05, 2025) establish a comprehensive regulatory framework for Mortgage Guarantee Companies (MGCs) in India. These directions outline the requirements for registration, capital adequacy, governance, and operational norms to ensure the financial stability and integrity of MGCs within the housing finance sector.