Synopsis: RBI has issued major structural changes focused on enhancing digital payment security, streamlining bank deposit regulations, and strengthening tax compliance in effect from 1st April, 2026.
The RBI has announced major changes in the rules that mainly apply to Basic Savings Bank Deposits (BSBD) accounts, UPI Transactions, Taxations and loan recovery, with the main focus being on BSBD accounts. These changes were mainly brought to make the processes more transparent, simple and financially inclusive. Major RBI rule changes include:
1. UPI ATM Withdrawals
UPI withdrawals will also be considered with debit card withdrawals for free withdrawals. You can withdraw freely 3 times in a metro city and 5 times in non-metro cities per month. After that, each withdrawal will face ₹23 + GST as withdrawal charges.
2. Cash Limits
If you deposit cash worth ₹10,00,000 or more, it will be the Bank’s responsibility to inform the Income Tax Department. Cash FD deposits above ₹10,00,000 will also be flagged by the Bank. The new rules may also require PAN for making a withdrawal or deposit of more than ₹10 Lakhs. Note: The amount specified is a cumulative year limit and not a single transaction limit.
Digital transactions like UPI, BHIM, GPAY, and banking transactions like NEFT, RTGS, IMPS, Bank cheque, DD/Payorder, will not be included in deposit limits. Only physical cash transactions through all joint Bank Accounts, individual savings bank accounts, minor’s bank accounts, and post office accounts will be included in the deposit limits.
3. Digital Footprint Scrutiny
The IT department can also check your social media, along with bank statements, for verification. If a mismatch is found, the IT department will issue a “Source of Wealth” notice.
4. Digital Fraud Compensation
From 1st July 2026, if you face a small value digital fraud (up to ₹50000), you can get up to 85% of it as compensation. Compensation is capped at 25,000, and this benefit can be claimed only once in a lifetime.
Also Read: From Form 16 to 26AS: 5 Major Income Tax Forms Set to Change from April 1, 2026
5. Rules Regarding Loan Recovery
- Banks and NBFC (Non-Banking Financial Company) agents cannot physically or mentally harass customers.
- They cannot contact the relatives of the loanee to add pressure for loan recovery.
- Calls and visits are allowed only between 8:00 am and 7:00 pm
- Violations can lead to severe penalties or even suspension of the recovery license by RBI.
6. Nominees
You can name up to 4 nominees for your savings, FD (Fixed Deposits) or lockers.
7. CIBIL Score
Your CIBIL score will be updated every 7 days. Previously, it was every 15 days.
8. Foreclosure Charges on Floating Rate loans:
Banks cannot charge a foreclosure/pre-payment penalty on individuals for closing their loans early. Loans that are covered in this rule change are Home Loans(floating), Individual loans(floating) and some MSME loans that are taken by individuals.
9. Bank Account Closure
Effective from 1st January, 2026, RBI will close these accounts:
- Dormant account (accounts that have had no activity for 2 years)
- Inactive accounts (there hasn’t been a customer initiated transaction for 12 months).
- Zero balance accounts that don’t have an updated KYC.
The transaction will be penalised by the IT department. These rules apply to all accounts . You can avoid getting penalised by
- Filing ITR and declaring the entire income
- Regularly checking for AIS/TIS
- Avoid depositing heavy cash
- Avoid cash deposits in joint accounts
Apart from these changes, RBI has mainly focused on the BSBD changes. These changes were primarily aimed at making the processes more transparent, simpler, and useful for customers. These rules were implemented based on the feedback on the draft BSBD Account Direction 2025 framework. These rules will come into force from 1st April, 2026 or earlier if the payment bank chooses to implement them earlier.
What are BSBD Accounts?
Basic Savings Bank Deposit accounts are primarily meant for poorer sections of society who want to avail banking services without facing the burden of banking charges or fees. These accounts can be opened by anyone without requiring a deposit of any money in the account, i.e., it does not require a certain minimum balance to be met.
Rules Revised
RBI has revised the existing BSBD rules to implement these new rules. RBI has issued amendments that apply to all banks, including commercial banks, payment banks, Co-operative banks, small finance banks, regional rural banks and local area banks. These amendments come under the broader Responsible Business Conduct framework, which is aimed at boosting BSBD accounts and improving customer service.
Key Features in BSBD Accounts
Under the new guidelines, every bank must continue to offer BSBD accounts as a savings product without minimum balance requirements and a set of free facilities that include:
- Unlimited free deposits.
- Free ATM cum Debit cards with zero annual charges.
- Chequebook with 25 free cheque leaves that are provided annually.
- Free passbook.
- Free Internet and mobile banking.
- Minimum of four free withdrawals per month.
- Banks are also supposed to give clear disclosure of the accounts to account holders.
Banks cannot force customers to take or use cheque books, ATM cards or digital banking. All these facilities are optional for the customer to use. Existing BSBD account holders can also ask for these newly added free services.
Conclusion
To conclude, these changes were brought in by the RBI keeping the future in mind. They want to reduce the total number of digital and taxation fraud that takes place in the country and ensure that customer protection and financial inclusion are achieved throughout all the Banks.
Written by Sagar V M
