RBI to Revamp Banking Rules from 2026: Zero Liability on Cyber Fraud

New Delhi (The Uttam Hindu): The Reserve Bank of India (RBI) has taken a major step toward a complete transformation of the country’s banking system. RBI has released a draft containing 238 new banking regulations for public review and has invited suggestions until November 10.

The aim of these changes is to enhance customer protection, simplify banking services, and ensure accountability among banks. Based on public and institutional feedback, the new rules will be implemented in phases starting from early 2026.

Zero Liability on Cyber Fraud

RBI has clarified that if a customer’s account is affected by cyber fraud and the incident is reported to the bank within three days, the customer will have zero liability—meaning they will not bear any financial loss.

Additionally, if banks fail to take timely action in such cases, they could face a penalty of up to ₹25,000.

100x Compensation for Locker Security Lapse

New locker-related rules have been introduced for customer protection. If a locker is robbed or damaged due to bank negligence or security failure, the bank will be required to pay up to 100 times the annual locker rent as compensation.

No More Prepayment Penalty on Loans

In a big relief for borrowers, RBI has proposed to completely remove prepayment penalties on all types of loans.

This means customers can repay their loans early without any additional fees.

To ensure transparency, all banks will be required to use a uniform formula for interest rate calculation.

Simplified KYC Process

Under the new guidelines, the Know Your Customer (KYC) process will become simpler.

For normal accounts, KYC will be required once every 10 years, for medium-risk accounts once every 8 years, and for high-risk customers once every 2 years.

Doorstep Banking for Senior Citizens

A special proposal has been made to support senior citizens aged 70 years or above.

They will be provided doorstep banking services, allowing them to access essential banking facilities from home, assisted by bank officials.

According to RBI, after reviewing all feedback by November 10, the new banking regulations will be gradually implemented between January 1, 2026, and April 1, 2026.

These reforms are expected to boost transparency and enhance customer experience in India’s banking sector.