The Reserve Bank of India (RBI) has proposed new draft regulations to make digital banking more secure, transparent, and customer-centric. As per the draft guidelines released this week, banks will now be required to obtain clear and recorded consent from customers before providing any digital banking services.
Transactional Services to Require RBI Approval
According to the draft, banks must categorically separate their digital services into two categories: view-only(checking account balance or downloading statements) and transactional (like fund transfers, loans, and bill payments).
For view-only services, banks can start offering them immediately but must inform the RBI within 30 days of launch.
However, transactional services will need prior approval from the RBI. Banks must meet specific criteria, including a minimum total asset base of ₹500 crore, robust technical infrastructure, and an audit clearance from the Indian Computer Emergency Response Team (CERT-In).
The proposal also mandates compliance with existing IT outsourcing norms, digital payment security standards, and anti-fraud safeguards. Digital banking modes include internet banking, mobile apps, and tablet-based access.
Customer-Friendly Reforms and Anti-Fraud Safeguards
RBI’s draft includes major steps to protect consumers:
Clear consent: Banks must obtain explicit customer approval before activating digital services. Terms and conditions must be offered in simple language—Hindi, English, or regional languages—for easy understanding.
Fraud prevention: Banks must set transaction limits, conduct regular fraud risk assessments, and monitor customers’ transaction patterns to detect irregularities.
Third-party restrictions: Banks will only be allowed to feature third-party services or products on their digital platforms if such products have been pre-approved by the RBI.
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The RBI is currently inviting feedback from stakeholders—including banks, fintechs, and the general public—until August 11, 2024. Final regulations will be issued thereafter.