RBI News
RBI appoints Usha Janakiraman as executive director ahead of MPC meet
Reserve Bank of India has appointed Usha Janakiraman as Executive Director with effect from December 1, 2025, according to an official release issued by the central bank. Her appointment comes just days ahead of the Monetary Policy Committee (MPC) meeting scheduled for December 3.
Prior to her elevation, Janakiraman served as Chief General Manager-in-Charge of the Department of Regulation at RBI’s Central Office in Mumbai. With more than three decades of experience at the central bank, she has worked across a wide range of functions, including banking regulation, supervision, external investment and operations, public debt management, currency management and allied areas.
As Executive Director, she will oversee the Department of Supervision (Risk, Analytics and Vulnerability Assessment), a critical function amid rising focus on systemic risk monitoring and data-driven supervision. Janakiraman is a Chartered Accountant by qualification.
The RBI had earlier appointed Sonali Sen Gupta and Sanjay Kumar Hansda as Executive Directors in October 2025. The latest appointment further strengthens the central bank’s senior leadership at a time of evolving regulatory and monetary policy challenges.
RBI urges banks to use technology to lower costs, sustain growth
Reserve Bank of India Governor Sanjay Malhotra has urged banks to leverage technology to reduce intermediation costs, operate with lower spreads and support sustainable credit growth, while simultaneously strengthening safeguards against rising digital frauds.
Addressing managing directors and chief executives of public sector and large private banks in Mumbai, Malhotra said technology-driven efficiency can help lenders function profitably even in a lower interest rate environment. The meeting followed a 25 basis points cut in the repo rate, which bankers noted could compress margins as lending rates linked to the repo adjust faster than deposit rates.
Malhotra pointed out that the cumulative 125 basis points reduction in policy rates has lowered funding costs for banks. When combined with reduced operating expenses through digitisation and automation, lenders can afford to work with narrower margins without compromising profitability.
At the same time, the RBI Governor cautioned banks about increasing instances of digital fraud. He emphasised the need for intelligence-driven monitoring systems and advanced safeguards to protect customers and preserve trust in the banking system, especially as digital adoption deepens across retail and corporate segments.
Unclaimed bank deposits fall ₹760 crore in October on govt–RBI push
Unclaimed bank deposits declined by around ₹760 crore in October following a coordinated campaign by the government and incentives provided by the Reserve Bank of India, Deputy Governor Shirish Chandra Murmu said during the post-Monetary Policy Committee press briefing.
Murmu noted that the reduction marked a sharp improvement over the historical monthly average of ₹100–150 crore. “The results are clearly visible. Going forward, we believe the pace will accelerate further as both the government and RBI continue to intensify efforts,” he said.
RBI Governor Sanjay Malhotra also flagged rising grievances and pendency with the RBI Ombudsman. He announced a two-month campaign beginning January 1, 2026, aimed at resolving all complaints pending for over a month.
The RBI has undertaken extensive public awareness initiatives across print, radio and digital media to educate depositors. It has also launched the centralised UDGAM portal to help individuals trace unclaimed deposits across banks. As of July 1, 2025, over 8.59 lakh users were registered on the platform.
The central bank said further enhancements to the portal are planned to improve usability and speed up claims.
RBI begins realisation phase to link UPI with Eurosystem’s TIPS
Reserve Bank of India has initiated the realisation phase to interlink India’s Unified Payments Interface (UPI) with the TARGET Instant Payment Settlement (TIPS) system operated by the Eurosystem, following constructive engagement with the European Central Bank.
The proposed UPI–TIPS linkage aims to enable faster, cheaper and more transparent cross-border remittances between India and the Euro area. RBI said it will work closely with NPCI International Payments Ltd (NIPL), the international arm of NPCI, and the European Central Bank to operationalise the connection, covering technical integration, risk management and settlement arrangements.
Over recent years, RBI has actively pursued interlinking UPI with fast payment systems in other jurisdictions to enhance global payment interoperability. Such initiatives are intended to improve accessibility and efficiency for users while reducing transaction costs.
Earlier this month, NIPL signed an agreement with BENEFIT to connect UPI with Bahrain’s Electronic Fund Transfer System through the Fawri+ service, enabling instant remittances between India and Bahrain.
The UPI–TIPS linkage represents another milestone in India’s expanding digital payments diplomacy and reflects growing international acceptance of UPI as a global real-time payments platform.
RBI board clears risk-based deposit insurance framework for banks
Reserve Bank of India’s Central Board of Directors has approved the introduction of a risk-based deposit insurance framework for banks at its meeting held in Hyderabad on December 19, 2025. The new model will replace the existing flat-rate premium structure and is expected to take effect from the next financial year.
The approval follows the RBI’s October 2025 proposal to move towards a differentiated premium system under which financially stronger banks would pay lower deposit insurance premiums, while weaker banks could be charged higher rates. At present, banks pay a uniform premium of 12 paise per ₹100 of assessable deposits to the Deposit Insurance and Credit Guarantee Corporation (DICGC).
RBI had earlier noted that while the flat-rate system is easy to administer, it does not reflect differences in banks’ financial soundness. The risk-based approach is expected to improve risk sensitivity, incentivise better governance and strengthen depositor protection.
The Central Board, in its 620th meeting, also reviewed global and domestic economic conditions, assessed challenges facing the financial system, and examined the draft Report on Trend and Progress of Banking in India, 2024–25. The meeting was chaired by RBI Governor Sanjay Malhotra.
No systematic bias in inflation forecasts, says RBI Deputy Governor
Reserve Bank of India Deputy Governor Poonam Gupta has said that there is no systematic bias in the central bank’s inflation forecasts, addressing concerns raised in some quarters about persistent overestimation.
Speaking at an event organised by the Ministry of Statistics and Programme Implementation, Gupta said the RBI relies on a combination of economic models, expert judgement and deliberations to arrive at its inflation projections. She noted that forecast deviations are a global phenomenon and not unique to India.
Responding to criticism that higher inflation estimates may have delayed interest rate cuts, Gupta said minimising forecast errors remains important, but the RBI’s projections are not biased in any particular direction. She emphasised that uncertainty in global trade, commodity prices and geopolitical developments complicates forecasting across economies.
Gupta also revealed that the RBI is considering releasing balance of payments data on a monthly basis, instead of the current quarterly frequency, given the increasing volatility in global trade and capital flows.
Such a move, she said, would provide policymakers and markets with more timely insights into India’s external sector position and improve macroeconomic monitoring amid rapidly shifting global conditions.
RBI expands gold metal loan norms, allows wider jeweller participation
Reserve Bank of India has permitted banks to extend gold metal loans (GMLs) to a wider range of jewellers under revised guidelines that will come into effect from April 1, 2026.
Under the updated framework, nominated banks importing gold can now lend to jewellers engaged in manufacturing or selling jewellery in domestic and export markets, even if they do not own manufacturing facilities. Such borrowers will be allowed to access GMLs provided the manufacturing process is outsourced to registered goldsmiths, artisans or certified manufacturing units.
The RBI amended provisions under its Master Direction on Import of Goods and Services and the Gold Monetisation Scheme to broaden eligibility and improve access to working capital in the gems and jewellery sector. Earlier, GMLs were largely restricted to jewellers with in-house manufacturing capabilities.
Clarifying the scope, the central bank said banks may extend import-linked GMLs to entities that either manufacture or sell jewellery, subject to compliance with outsourcing conditions.
The move is expected to improve credit access for smaller and mid-sized jewellers, enhance formalisation of the sector and support export competitiveness, while maintaining regulatory oversight and traceability in gold usage.
RBI consolidates 9,446 circulars into 244 master directions
Reserve Bank of India has completed a sweeping overhaul of its regulatory framework by consolidating 9,446 circulars issued over seven decades into 244 master directions, covering 11 categories of regulated entities.
The reform, described by the central bank as a once-in-a-generation exercise, eliminates overlapping, outdated and redundant instructions, some dating back to 1944. Of the repealed circulars, 5,673 were found to be obsolete and were completely withdrawn.
RBI Deputy Governor Shirish Chandra Murmu said the consolidation is aimed at improving regulatory clarity and reducing compliance burden. “This milestone will significantly improve accessibility of regulatory instructions and advance ease of doing business,” he said.
The exercise is not intended to alter regulatory intent but to reorganise existing rules into a single, continuous reference framework. Regulated entities will no longer need to navigate thousands of legacy circulars to ensure compliance.
Among the new inclusions is a master direction on digital banking, mandating explicit customer consent and compulsory transaction alerts, reflecting the regulator’s focus on consumer protection in a digital environment.
RBI adds seven entities to alert list of unauthorised forex trading platforms
Reserve Bank of India has added seven new entities and websites to its ‘Alert List’ of unauthorised forex trading platforms, warning the public against dealing with entities not permitted under Indian law. The newly added names include Starnet FX, CapPlace, Mirrox, Trive, NXG Markets and Nord FX.
With these additions, the total number of entities on the RBI’s alert list has risen to 95. These platforms are neither authorised to deal in foreign exchange under the Foreign Exchange Management Act (FEMA), 1999, nor permitted to operate electronic trading platforms for forex transactions.
The central bank clarified that the alert list also includes entities that appear to promote unauthorised platforms through advertisements or claim to offer training or advisory services related to such trading activities. RBI cautioned that the list is not exhaustive and that absence of a name on the list should not be construed as regulatory approval.
Members of the public have been advised to independently verify the authorisation status of any entity through RBI’s official list of authorised persons and approved electronic trading platforms before engaging in forex transactions, as unauthorised trading exposes users to financial and legal risks.
RBI does not target any specific level for rupee, says Governor Sanjay Malhotra
Reserve Bank of India Governor Sanjay Malhotra has reiterated that the central bank does not target any specific level for the Indian rupee and allows market forces to determine currency movements.
Speaking after delivering the VKRV Rao Memorial Lecture at the Delhi School of Economics, Malhotra said the rupee’s movement reflects demand and supply dynamics in the foreign exchange market. “If demand for dollars goes up, the rupee depreciates; if demand for the rupee rises, it appreciates,” he said.
The comments come amid a 3.6 per cent depreciation of the rupee, driven by global factors including trade tensions, a stronger US dollar and foreign portfolio investor outflows exceeding $16 billion. The rupee recently closed at 88.71 against the US dollar.
Malhotra assured that India’s foreign exchange reserves remain robust and sufficient to manage volatility. He also expressed confidence that India would secure a favourable trade agreement with the US, which could ease pressure on the current account.
Responding to another query, the Governor said he expects a few Indian banks to feature among the world’s top 100 lenders in the near future.
RBI cuts repo rate by 25 bps to 5.25%, lowest in three years
Reserve Bank of India’s Monetary Policy Committee (MPC) unanimously voted to cut the policy repo rate by 25 basis points to 5.25 per cent, marking the lowest level in three years, as easing inflation created space to support growth.
The decision follows two consecutive policy reviews where rates were kept unchanged. With the latest cut, the RBI has reduced the repo rate by a cumulative 125 basis points in calendar year 2025. The MPC retained its ‘neutral’ policy stance despite the rate reduction.
Alongside the cut, the RBI announced liquidity-enhancing measures, including open market purchases of government securities worth ₹1 lakh crore and a three-year USD/INR buy-sell swap of $5 billion to inject durable liquidity.
The central bank revised its FY26 real GDP growth projection upward by 50 basis points to 7.3 per cent and lowered its CPI inflation forecast by 60 basis points to 2 per cent. Governor Sanjay Malhotra described the current environment of strong growth and benign inflation as a “Goldilocks moment”.
However, he noted that growth momentum in the second half of FY26 is expected to moderate compared to the first half.
RBI plans mandatory disclosure of forex transaction costs for retail users
Reserve Bank of India has proposed mandatory disclosure of transaction costs by authorised dealers for foreign exchange transactions offered to retail users, as part of efforts to enhance transparency in the forex market.
In a draft circular issued for public consultation, the RBI said authorised dealers will be required to clearly disclose the total transaction cost for foreign exchange ‘cash’, ‘tom’ and ‘spot’ contracts before entering into a deal. The disclosure must include remittance fees, exchange rates, currency conversion charges and costs imposed by intermediaries, and be reflected in the deal confirmation.
The central bank has invited comments from banks, market participants and other stakeholders on the draft by January 9, 2026.
RBI noted that the move builds on earlier transparency measures introduced in January 2024, when authorised dealers were mandated to provide mid-market rates, bid and ask prices for foreign exchange derivative contracts to retail users prior to execution.
By ensuring upfront clarity on pricing, the RBI aims to protect retail customers from hidden charges, promote informed decision-making and strengthen trust in the foreign exchange market, particularly as cross-border transactions and digital forex usage continue to expand.
RBI eases transaction account norms after industry pushback
Reserve Bank of India has relaxed its proposed restrictions on the opening of current accounts by banks, withdrawing an earlier draft rule that would have limited corporates to maintaining such accounts with only two banks holding at least 10 per cent exposure each. The October 1 draft proposal had drawn strong objections, particularly from private sector lenders, who argued that it would disproportionately benefit public sector banks that dominate consortium lending.
Private banks had flagged concerns around customer choice, digital transaction efficiency and the potential loss of low-cost current account deposits. After examining stakeholder feedback, the RBI removed the cap entirely in its final directions, applicable to commercial banks, small finance banks, payments banks, local area banks, regional rural banks and cooperative banks.
Under the revised framework, banks may freely maintain current or overdraft accounts for borrowers with aggregate banking exposure below ₹10 crore. For higher exposures, banks may offer such accounts if they hold at least a 10 per cent share of the borrower’s total banking exposure or fund-based exposure. The RBI said detailed reasoning for the changes has been published alongside the final rules.
RBI, SBI tell Supreme Court personal hearings impractical in fraud cases
Reserve Bank of India and State Bank of India have told the Supreme Court that granting personal hearings to account holders before declaring an account as fraud is operationally unfeasible, given the scale of banking frauds in the country.
Appearing before a bench of Justices J.B. Pardiwala and K.V. Viswanathan, Solicitor General Tushar Mehta said the banking system witnessed nearly 60,000 fraud cases over the past two financial years, involving ₹48,244 crore. In FY25 alone, 23,953 frauds amounting to ₹36,014 crore were reported, marking a sharp rise from ₹12,230 crore in FY24.
Mehta argued that mandating oral hearings would derail fraud classification processes and allow offenders to delay regulatory action. RBI’s counsel added that the central bank has not issued any circular requiring personal hearings, leaving such decisions to banks’ discretion.
While acknowledging operational challenges, the bench observed that there may still be circumstances where a hearing is warranted, noting the absence of structured guidelines on the issue.
RBI strengthens basic savings bank deposit account framework
Reserve Bank of India has directed banks to expand and strengthen the offering of Basic Savings Bank Deposit (BSBD) accounts, incorporating enhanced customer-friendly features under its amended Responsible Business Conduct Directions, 2025.
Under the revised norms, BSBD account holders cannot be charged issuance or annual renewal fees for ATM or debit cards. Banks must also provide mobile and internet banking facilities and a free cheque book with at least 25 leaves annually. The amendments will take effect from April 1, 2026, or earlier if adopted by banks.
The RBI said customers may convert an existing savings account into a BSBD account, with banks required to complete the process within seven days of receiving a written or digital request. However, customers are restricted to holding only one BSBD account across the banking system.
Originally introduced as “no-frills” accounts nearly two decades ago, BSBD accounts were designed to promote financial inclusion through low or zero minimum balance requirements. The RBI removed the “no-frills” label in 2012 to reduce stigma and mandated minimum free facilities. The latest changes aim to deepen usage and improve service quality for low-income customers.
RBI asks microfinance lenders to prioritise borrower income stability
Reserve Bank of India has urged microfinance institutions (MFIs) to shift focus from mere access to credit towards ensuring long-term income stability and formal credit pathways for borrowers, warning that regulatory flexibility must be matched with responsible conduct.
Speaking at the launch of the India Microfinance Review FY25, Deputy Governor Swaminathan J said the sector has reached an inflection point after a decade of rapid expansion driven by Jan Dhan, Aadhaar, UPI and account aggregator frameworks. He emphasised that the next phase must prioritise depth, quality and sustainability of financial inclusion.
“The objective is to convert first access into regular use, regular use into stable income, and stable income into formal credit,” he said. Swaminathan cautioned that misuse of regulatory freedom could undermine borrower welfare.
He outlined five key priorities for MFIs: household-level credit assessment, technology-driven underwriting, diversification into micro-enterprise finance, climate-resilient product design and responsible data usage. He also warned against unreasonable pricing, inaccurate credit bureau reporting, model bias and cybersecurity risks, stating that these factors could stall the sector’s long-term progress if left unaddressed.
RBI issues revised norms for cash credit, overdraft facility
Reserve Bank of India has removed all restrictions on banks opening and maintaining cash credit accounts, clarifying that such facilities are operationally distinct from current and overdraft accounts. The changes form part of the central bank’s revised transaction account framework and follow feedback received on the draft rules issued on October 1, 2025.
In its clarification, the RBI said cash credit accounts function as short-term, flexible working capital loans and should be offered based on customer requirements without regulatory caps. Accordingly, banks are now free to extend cash credit facilities without any restrictions under the transaction account norms.
The central bank has also eased rules governing current and overdraft accounts. Banks may maintain current accounts without limitation for customers whose aggregate banking exposure is below ₹10 crore. For borrowers with exposures exceeding this threshold, banks holding at least a 10 per cent share in the total banking system exposure to the borrower may provide current and overdraft facilities.
The RBI reiterated that current, overdraft and cash credit accounts are collectively classified as transaction accounts, but their operational roles differ. The revised norms aim to provide greater flexibility to banks while ensuring smoother transaction banking for businesses and individuals with high transaction volumes.
RBI calls for full disclosure of forex payments for retail users
Reserve Bank of India has proposed stricter disclosure norms for foreign exchange transactions involving retail users, seeking greater transparency in pricing and charges. In a draft circular, the central bank has asked authorised dealers to provide a complete breakdown of transaction costs associated with foreign exchange cash, tom and spot contracts.
According to the draft, authorised dealers must disclose all components of the total transaction cost before entering into a contract with a retail user. This includes remittance and receiving fees, charges levied by intermediaries, applicable foreign exchange rates and currency conversion costs. These details must also be included in the deal confirmation.
The RBI said the proposal builds on earlier transparency measures. In January 2024, authorised dealers were mandated to disclose the mid-market rate or bid-ask quote for foreign exchange and foreign currency interest rate derivative contracts prior to execution, along with inclusion in the term sheet or deal confirmation.
By extending similar disclosure requirements to foreign exchange cash, tom and spot transactions, the RBI aims to ensure that retail users clearly understand the true cost of their forex dealings. The central bank has invited feedback from stakeholders before finalising the guidelines.
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