RBI News for May 2026
RBI clears Emirates NBD’s stake acquisition in RBL Bank
Reserve Bank of India has approved UAE-based Emirates NBD to acquire up to a 74% stake in RBL Bank for around $3 billion, marking the largest foreign investment in an Indian bank.
Following the approval, RBL Bank will be treated as a foreign bank subsidiary, governed under norms applicable to wholly owned subsidiaries of foreign banks. However, the RBI has relaxed certain governance requirements, including the condition mandating at least half the board to comprise independent directors.
The bank has been directed to amend its Articles of Association to reflect the new ownership structure and obtain further regulatory approvals.
The transaction is expected to strengthen capital, enhance global integration, and support the bank’s long-term growth strategy.
Government launches AI-based ‘Kar Saathi’ for tax filing
The Income Tax Department, under the Central Board of Direct Taxes, has launched ‘Kar Saathi’, an AI-powered assistant to simplify income tax return filing and taxpayer support.
Integrated with the e-filing portal, the tool functions as a real-time chatbot, helping users navigate tax rules, forms, and compliance requirements. The initiative is part of the PRARAMBH 2026 campaign aimed at familiarising taxpayers with updated provisions effective April 2026.
The launch comes ahead of the assessment year 2026–27 filing cycle, enabling taxpayers to handle revised forms and procedures more efficiently.
The move reflects the government’s push towards digitalisation of tax administration, improving accessibility, accuracy, and ease of compliance.
RBI proposes bank account portability for customers
Reserve Bank of India is planning to introduce account portability, allowing customers to switch banks without changing their account numbers.
The proposal, outlined under the Payments Vision 2028 framework, includes a Payments Switching Service (PaSS) aimed at reducing friction in shifting banking relationships. Currently, customers face challenges in updating standing instructions, mandates, and linked services when changing banks.
By enabling seamless switching, the move is expected to enhance competition among banks, improve customer service standards, and increase flexibility for account holders.
The initiative could significantly transform retail banking by reducing customer inertia and promoting a more dynamic financial ecosystem.
Residents allowed to exchange rupees at airport forex counters
Reserve Bank of India has permitted residents to exchange Indian currency notes at foreign exchange counters located in departure areas of international airports.
Earlier, this facility was largely limited to non-residents. The revised guidelines allow residents to access forex services at counters situated in duty-free or security hold areas beyond immigration and customs checkpoints.
The change follows amendments to the central bank’s Master Direction on Money Changing Activities.
The move is expected to enhance convenience for travellers by providing easier access to currency exchange services at airports, aligning with evolving travel and foreign exchange requirements.
RBI data quality index improves for banks
Reserve Bank of India reported an improvement in the Supervisory Data Quality Index (sDQI) for scheduled commercial banks, reflecting better regulatory reporting standards. The overall sDQI score rose to 90.9 in December 2025 from 90.7 in September, indicating gains in accuracy, consistency, and compliance practices.
The index evaluates banks on parameters such as accuracy, timeliness, completeness, and consistency. While most bank groups showed progress, public sector banks saw a marginal decline due to weaknesses in completeness and timeliness.
Small finance banks emerged as top performers with a score of 91.9, supported by strong data accuracy. The improvement highlights strengthening internal governance and better data management across the banking system.
RBI penalises banks, fintech for compliance lapses
Reserve Bank of India imposed monetary penalties on Union Bank of India, Central Bank of India, Bank of India, and fintech firm Pine Labs for regulatory non-compliance. The fines ranged from Rs. 3.1 lakh to Rs. 95.4 lakh, depending on the nature of violations.
Union Bank was penalised for delays in crediting customer accounts in unauthorised transaction cases, while Bank of India faced action for lapses in priority sector lending norms and interest payments. Central Bank of India was penalised for deficiencies in KYC and financial inclusion norms.
Pine Labs was fined for issuing prepaid payment instruments without proper KYC verification. The RBI clarified that these penalties relate to compliance failures and do not question the validity of transactions.
RBI caps loans against shares to curb market risk
Reserve Bank of India has capped loans to individuals for purchasing shares and securities at Rs. 1 crore across the banking system. Borrowing for IPOs, follow-on offers, and ESOPs will be limited to Rs. 25 lakh per individual.
The move aims to prevent excessive leverage and speculative activity in equity markets. Such system-wide caps reduce concentration risk and limit the build-up of large exposures across multiple banks.
Analysts believe the measure will help maintain financial stability by controlling credit-driven market volatility, especially during periods of rapid market growth.
Unclaimed deposit payouts surge after RBI campaign
Reserve Bank of India said payouts of unclaimed deposits have surged significantly following targeted campaigns and incentive schemes. Monthly payouts rose to Rs. 760 crore from October 2025 onwards, compared to Rs. 180 crore during April–September 2025.
The increase was driven by the “Aapki Poonji, Aapka Adhikar” campaign and incentives provided to banks for tracing customers and settling claims. The RBI has also supported banks financially to accelerate the process.
The initiative has improved financial inclusion by helping individuals reclaim dormant funds across deposits, insurance, and other financial instruments.
CBDC transactions cross Rs. 34,000 crore milestone
Reserve Bank of India reported that central bank digital currency (CBDC) transactions have crossed 150 million in volume, with total value exceeding Rs. 34,000 crore.
Deputy Governor T. Rabi Sankar highlighted that programmability remains a key feature under development, enabling targeted and conditional payments in the future. He described CBDC as a “future of payments,” while emphasising that the rollout will be gradual, depending on domestic readiness and global adoption trends.
The RBI is also exploring an AI sandbox framework under a self-regulatory organisation (SRO) model to encourage innovation in fintech. The steady rise in CBDC usage indicates growing acceptance, although the central bank remains cautious about a full-scale launch.
RBI eases branch expansion rules for NBFCs
Reserve Bank of India has liberalised norms for non-banking financial companies (NBFCs), allowing them to open branches without prior approval in most cases.
The move aims to improve ease of doing business and provide operational flexibility. However, a calibrated framework remains for deposit-taking NBFCs based on financial strength and credit ratings.
NBFCs with net owned funds above Rs. 50 crore and a credit rating of AA or higher can expand operations nationwide, while those with weaker ratings will face geographical restrictions. Smaller NBFCs will be limited to operating within their home states.
The revised rules are expected to accelerate financial inclusion and deepen credit access, particularly in underserved regions, while maintaining regulatory safeguards.
RBI extends export relief amid West Asia disruptions
Reserve Bank of India has extended key trade relief measures introduced in November 2025 to support exporters facing geopolitical and logistical challenges.
Exporters will continue to benefit from an extended timeline for realisation and repatriation of export proceeds, increased from nine months to 15 months. Additionally, the period for realisation of pre- and post-shipment export credit remains extended to 450 days for eligible disbursals.
These measures aim to ease liquidity pressures on exporters affected by disruptions in global trade routes, particularly amid the ongoing West Asia crisis.
The extension provides stability and flexibility to exporters navigating uncertain external conditions.
Account portability key focus under RBI Payments Vision 2028
Reserve Bank of India is prioritising bank account portability and cross-border payment efficiency under its Payments Vision 2028 framework.
The proposed Payments Switching Service (PaSS) will allow customers to switch banks without changing account numbers by centralising all payment mandates. This aims to eliminate friction caused by updating standing instructions and improve customer convenience.
The RBI also plans to enhance cross-border payments by reducing costs, improving speed, and aligning domestic systems with global standards.
These initiatives are expected to boost competition, encourage innovation, and strengthen user-centric banking services.
RBI opens term money market to non-bank players
Reserve Bank of India has allowed non-bank entities, including NBFCs, corporates, housing finance companies, and all-India financial institutions, to participate in the term money market.
The term money market facilitates borrowing and lending for periods ranging from 14 days to one year and has so far been limited to banks and primary dealers. The move aims to deepen liquidity and improve monetary policy transmission.
According to State Bank of India, the broader participation will enhance demand for funds, enable better utilisation of surplus liquidity, and may help moderate yields. The central bank has also raised borrowing limits for standalone primary dealers to further support market activity.
RBI suggests 1-hour delay for high-value digital payments
Reserve Bank of India has proposed introducing a one-hour delay for digital payments above Rs. 10,000 to curb rising fraud risks.
During this cooling-off period, customers will have the option to cancel transactions, while banks can flag suspicious activity and alert users. The proposal also includes additional safeguards such as verification through trusted individuals for vulnerable users and stricter monitoring of accounts receiving large credits.
The RBI has invited stakeholder feedback on the discussion paper until May 8, after which draft guidelines may be issued. The move is aimed at enhancing consumer protection in the fast-growing digital payments ecosystem.
RBI extends export credit relief amid global disruptions
Reserve Bank of India has extended the enhanced export credit period of 450 days for pre- and post-shipment finance until June 30, 2026.
The facility, initially introduced in November 2025, aims to support exporters dealing with disruptions caused by the ongoing West Asia crisis. The extension also retains the relaxation allowing exporters up to 15 months to realise and repatriate export proceeds, compared to the earlier nine months.
The central bank said the decision was based on feedback from industry participants facing logistical challenges and supply chain bottlenecks. The move is expected to ease cash flow pressures and ensure continuity in export operations during uncertain global conditions.
RBI proposes classification, uniform pay for banking correspondents
Reserve Bank of India has proposed categorising banking correspondents (BCs) and introducing uniformity in their remuneration structure.
Under the draft norms, three delivery points have been defined: bank branches, Business Correspondent-Banking Outlets (BC-BO), and Business Correspondent-Banking Touchpoints (BC-BT). The regulator aims to standardise commission structures, which currently vary widely across banks.
Banking correspondents play a key role in extending financial services to remote areas, with over 16 lakh BCs operating nationwide. The proposed changes seek to strengthen the BC ecosystem, improve service delivery, and support financial inclusion.
RBI proposes asset-based classification for top NBFCs
Reserve Bank of India has proposed a major overhaul in identifying Upper Layer (UL) non-banking financial companies (NBFCs), shifting from a scoring-based system to a clear asset-size threshold.
Under the draft guidelines, NBFCs with assets of Rs. 1 lakh crore or more will be classified as Upper Layer entities, subjecting them to stricter regulatory and supervisory oversight. This replaces the earlier methodology that relied on a mix of quantitative, qualitative, and supervisory parameters.
The proposal also brings government-owned NBFCs such as PFC, REC, and IRFC under the scale-based regulatory framework, removing earlier regulatory arbitrage. Industry experts note that the move enhances transparency and predictability, signalling large NBFCs nearing the threshold to prepare for tighter compliance norms.
The change is expected to reshape the UL list, with some private NBFCs potentially exiting while large public entities enter the category.
