To make digital banking safer for all users, the Reserve Bank of India (RBI) has released a draft of new regulations. Internet banking, mobile banking, and any other online services provided by banks are covered by the new regulations.
The new regulations require banks to provide consumers with clear options, allowing them to choose between using full transaction services or simply “viewing only” their accounts. People who only want a basic service, like a debit card, cannot be forced to adopt digital banking by their banks.
Applauding the move, Shikhar Aggarwal, Chairman, BLS E-Services Ltd stated, “The RBI’s proposal of New Digital Banking Guidelines to curb cyber fraud is a significant step toward safeguarding customers in the digital banking space. The guidelines introduce stronger fraud protection measures, ensuring banks comply with enhanced customer protection protocols, including limiting liability in cases of fraud.”
Adding further he opined, “A key highlight of the proposal is the prohibition on banks from displaying third-party products or services—including those from promoter groups or affiliated entities—on their digital platforms. This move aims to reduce conflicts of interest and enhance transparency. Additionally, banks offering mobile banking services outside dedicated apps must ensure network independence, allowing seamless access for customers across all telecom providers.”
Enhancing Consumer Consent & Data Transparency
Additionally, the RBI wants banks to obtain clients’ explicit consent before allowing them to use any digital services. Each and every consumer must be informed of all fees, how to contact support in the event of an issue, and how to receive transaction alerts via email or SMS. Another crucial fact is that without RBI approval, banks are not allowed to promote third-party products on their applications or websites, such as investment plans or insurance.
All banks must employ appropriate fraud detection systems and monitor anomalous transactions in order to prevent online fraud. In order to promptly identify any unusual activity, they should also research how clients typically spend their money. On July 21, the RBI shared these proposed rules. By August 11, 2025, the central bank wants banks, professionals, and the general public to submit their recommendations.
Sharing his views on the development, Tushar Sharma, Co-founder of Bondbay (platformed by Dexif Securities) stated, “We welcome the RBI’s proposed digital banking guidelines, which emphasise strong risk controls and customer consent. These measures highlight the critical importance of regulatory alignment—a clear, predictable framework empowers innovators to build securely and responsibly. As a fintech leader operating in the cloud ecosystem, I believe digital security isn’t just about compliance—it’s about smart design choices that embed trust. Tools like OTP-based logins, penny-drop account verifications, name-matching protocols, and Aadhaar-enabled video KYC offer robust, scalable ways to prevent fraud while ensuring smooth onboarding. These safeguards, when implemented thoughtfully, strike the right balance between user experience and security. The RBI’s consultative, forward-thinking approach signals that India is serious about creating a resilient digital financial backbone. By providing regulatory clarity and encouraging secure-by-design systems, the guidelines empower fintecs to innovate responsibly.”
What This Means for Digital Banking Users?
Users of online banking should anticipate more stringent security protocols and fewer unpleasant surprises if these regulations are implemented. They will be able to choose just the digital services they truly desire. Everyone will benefit from easier and more equitable banking since no one will be compelled to sign up for something they don’t need.
Banks to Implement DoT’s Fraud Risk Indicator
The RBI has instructed banks and payment institutions to incorporate the telecom department’s (DoT) financial fraud risk indicator (FRI) into their systems in light of the increasing number of cybercrimes.
The RBI guideline, released on June 30, seeks to use cutting-edge technologies to combat cybercrime. The DoT hailed the action as a turning point. In a statement, the DoT claimed that the RBI’s directives mark a turning point in the battle against financial crimes made possible by cyberspace and demonstrate the effectiveness of interagency cooperation in protecting individuals in India’s expanding digital economy.
FRI is a risk-based statistic that was introduced in May and links a cellphone number to the level of financial fraud. Data from DoT’s Chakshu platform, the government’s cybercrime reporting portal, and information provided by banks and financial organisations are used to highlight the numbers.
This makes it possible for the appropriate parties to take further consumer protection steps to stop financial frauds committed using high-risk mobile numbers.
Real-time FRI allows banks and other financial institutions to take preventative steps like rejecting suspicious transactions, warning or alerting clients, and postponing high-risk transactions.
