RBI Issues the Draft RBI (Branch Authorisation) Amendment Directions 2026

PR No. 2026-2027/27; Dated: 06.04.2026

The Reserve Bank of India (RBI) has issued the draft ‘RBI (Branch Authorisation) Amendment Directions, 2026’, proposing an updated framework governing the engagement and functioning of Business Correspondents (BCs) and related operational aspects.

1. Scope of the Draft Directions

The draft directions cover a wide range of areas, including:

• Eligibility criteria for BCs
• Operating structure of BC and BC sub-agents
• Guidelines for engagement of BCs
• Scope of permissible activities
• KYC norms and compliance requirements
• Customer confidentiality and data protection
• Information Technology (IT) standards

2. Standards for Technology and Data Protection

Banks are required to:

• Ensure security and confidentiality of customer information handled by BCs
• Use robust and secure technology infrastructure
• Maintain high standards in equipment and systems deployed by BCs

3. Transactions and Risk Monitoring

The draft mandates that banks:

• Continuously monitor BC and sub-agent activities through transaction monitoring systems
• Define operational parameters based on risk profiles
• Incorporate factors such as:

1. 1. Location and nature of transactions
   2. Transaction volume and velocity

These must form part of the bank’s fraud risk management framework.

4. Grievance Redressal Mechanism

Banks must establish a robust Grievance Redressal Machinery, including:

• A designated Grievance Redressal Officer
• Wide publicity of grievance channels through electronic and print media
• Disclosure of:

1. 1. Contact details of the officer
   2. Grievance procedures and timelines on the bank’s website

If:

• A complaint is rejected (wholly or partly), or
• No response is received within 30 days,

the customer may approach the RBI Ombudsman for further redressal.

5. Consumer Protection and Transparency

The draft directions emphasise:

• Customer protection measures
• Transparency in BC operations
• Disclosure of BC details on the bank’s website

Additionally:

• Banks must include in their Annual Report:

1. 1. Progress in extending banking services through BCs
   2. Initiatives undertaken in this regard

6. Training and Certification Requirements

The framework also covers:

• Training and certification standards for BCs
• Ensuring BC personnel are adequately equipped to deliver banking services responsibly

7. Conclusion

The draft directions aim to strengthen the BC model through enhanced governance, risk management, and customer protection, while promoting financial inclusion with robust operational safeguards.

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