RBI set to tighten digital banking rules
It could pose a setback to cross-selling financial products
The Reserve Bank of India (RBI) has proposed new rules that will prohibit banks from displaying third-party products and services on their digital banking platforms. It includes offerings from promoter groups or entities within the bank’s group.
Hence, new digital initiatives will require prior approval from the Central bank, and the banks must obtain consent from customers before offering such services.
In its draft Master Direction on Digital Banking Channels Authorisation, 2025, the RBI stated, “Third-party products and services, including those of promoter groups or bank group entities, shall not be displayed on banks’ digital banking channels except as specifically permitted by the Reserve Bank from time to time.”
The matter will be open for public feedback until 11 August.
The RBI also warned banks against making it mandatory for the customer to opt for any digital banking channel to avail any other facility, including debit cards.
Meanwhile, banks that already have approval for specific digital platforms, such as mobile banking, must obtain fresh approval to introduce any additional digital banking channels.
The Indian banking regulatory body directed the banks to formulate comprehensive policies for all digital banking channels, addressing statutory and regulatory requirements, including management of liquidity and operational risks. It stated that the responsibility for risk oversight would lie with the senior management.
The RBI added that the banks that have implemented a core banking solution and enabled their public-facing information technology (IT) infrastructure to handle the Internet Protocol Version 6, will be eligible to provide a view-only banking facility for internet banking, mobile banking, and other digital banking channels-based services.