Banking In 2025: RBI's Major Customer-Facing Changes

In 2025, the Reserve Bank of India (RBI) made several announcements that directly impacted the borrowers, depositors, and users of digital payments. These regulations included interest rates, bank account activities, Know Your Customer (KYC) regulations, credit reports, and the Unified Payments Interface (UPI). The two of them influenced the way the customers related to banks throughout the year.

Repo Rate Cut

On December 5, the RBI reduced the repo rate to 5.25 per cent. This was the fourth reduction in the rate in the year. Lower policy rates reduce borrowing costs for banks and typically translate into lower EMIs for home loans, personal loans, and other floating-rate credit products.

Dormant Account Closures And Inactive Account Closures

Since January 1, the banks started closing or freezing the accounts that had not been used for 12 months or which had not been used for two years and were not in use. This action was meant to contain the mule accounts that were being used to commit financial fraud, and customers were encouraged to maintain accounts with one transaction.

KYC Flexibility And Updates

Low-risk customers have received a one-year grace period after KYC expiry before banks can restrict their accounts. Business Correspondents (BCs) have also been offered the option for customers to perform KYC at home or at local stores with the help of biometric authentication. Banks are now asked to send three KYC reminders before and after the expiry of KYC, and one of them has to be physical.

Online Loan Guarantees And Credit Card Viewability

Digital loan applications will have to show a Key Fact Statement (KFS) with a summary of the interest rate, fees, and total repayment. There are also three days of a cooling-off period offered to borrowers to cancel loans. The credit card statements now must indicate the exact name of the merchant and the location where the transaction occurred. Not until three days after the due date may the banks report to credit bureaus customers as defaulting.

UPI Limits And Credit Lines

Since August 1, the balance checks on UPI apps have been restricted to 50 attempts a day, and linked account views to 25 attempts a day per application. Failed recurring payments can be retried automatically only 3 times. In November, the UPI transaction limit was increased to Rs 5 lakh on hospital bills, educational fees, and insurance premiums. UPI also allows customers to attach pre-approved credit limits to UPI, with limits of up to Rs 1 lakh per day.

Faster Banking Services And Consumer Protection

The cheque clearing was shifted to hourly settlement cycles since October 4,2025, reducing the clearing time.

Bank Account Nominees

A single bank account can have up to four nominees, each with a provision for a percentage share. The banks must pay claims within 15 days of obtaining full documentation of the deceased account holder or locker owner. Official bank calls now have to begin with 160 to make the customers distinguish between authentic and fake calls.

Other Decisions

RBI also prohibited forced bundling, where a bank could not credit or renew a deposit without buying insurance or any other product. All banks have also now moved to a new, authentic domain, ending with bank.in, to curb digital fraud.

The announcements made in 2025 have touched upon several aspects of banking, including loans and deposits, digital payments, among others, and focused on making it faster, safer, and more understandable to customers.