RBI issues seven new master directions on digital banking

The Reserve Bank of India (RBI) on Friday released seven new master directions on Digital Banking Channels Authorisation for regulated entities, including commercial banks and small finance banks, marking a major step toward strengthening and standardising India’s digital banking framework.The announcement is part of a broader overhaul undertaken by the central bank to enhance clarity, improve accessibility, and reduce compliance burden for regulated entities (REs), thereby supporting the government’s wider objective of improving ease of doing business in the financial sector.
Following extensive consultations with stakeholders, the RBI has issued 244 master directions (MDs), consolidating all existing instructions administered by the Department of Regulation. These directions, released separately for 11 categories of regulated entities, are organised across key regulatory themes to ensure uniformity and clarity.
Among these, seven new master directions relate specifically to Digital Banking Channels Authorisation for the following regulated entities:
•Commercial banks
•Small finance banks
•Payments banks
•Local area banks
•Regional rural banks
•Urban co-operative banks
•Rural co-operative banks
According to information,the new guidelines will come into effect from January 1, 2026. They outline policies and procedures for offering digital banking services, eligibility criteria, technological standards, compliance requirements, customer conduct norms, and exemptions.As per the norms, all regulated entities must establish *comprehensive internal policies* covering every digital banking channel, taking into account statutory and regulatory requirements, including those related to liquidity and operational risks in a digitally driven environment.The directions define digital banking channels as services delivered through internet banking, mobile banking, or other electronic platforms enabling customers to conduct financial and non-financial transactions through digital devices with a high degree of automation and integration with external systems.The RBI’s move is expected to bring greater uniformity, improve digital security, and strengthen governance practices across the banking ecosystem as India continues its rapid shift toward digital financial services,noted experts.

(Business Correspondent)