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The Reserve Bank of India’s latest Statement on Developmental and Regulatory Policies signals a stronger push toward responsible lending practices, secure digital ecosystems, and improved data governance—key pillars of India’s evolving cyber law and financial-privacy framework.
A major part of the policy update focuses on safeguarding borrowers from unfair digital-lending practices. The Reserve Bank intends to widen existing protections against foreclosure charges and pre-payment penalties by extending these safeguards to loans granted to Micro and Small Enterprises. This move aligns with the broader objectives of consumer protection, transparency, and ethical conduct in digital financial services, where data-driven lending models have raised concerns about misuse of customer information.
The central bank is also preparing a discussion paper on new capital-raising mechanisms for Primary (Urban) Co-operative Banks. By examining innovative instruments such as special shares and share-premium structures, the Reserve Bank aims to modernise the cooperative banking sector while ensuring that governance and risk-management practices meet contemporary standards, including those relating to cybersecurity and data privacy.
One of the most significant announcements is the creation of the Reserve Bank – Climate Risk Information System. While centred on climate-risk management, the initiative reflects a broader push toward secure data infrastructure. The system will include a public directory of climate-related data sources and a controlled data portal for regulated entities. Its design emphasises trusted data flows, standardisation and secure digital access—principles that mirror ongoing advancements in India’s cyber-governance architecture.
In the sphere of digital payments, the Reserve Bank has approved enhancements to UPI transaction limits. UPI123Pay, designed for feature-phone users, will see its per-transaction limit raised to ₹10,000. UPI Lite limits will also be increased to encourage safer small-value digital transactions, particularly in offline environments. These changes are set against the backdrop of India’s rapid digital-payment expansion, where cyberfraud, phishing, and unauthorised access remain key threats. Strengthening low-value digital instruments helps reduce risk while promoting financial inclusion.
To further enhance security in electronic fund transfers, the Reserve Bank will introduce a beneficiary account name look-up feature for RTGS and NEFT transactions. By allowing users to verify the beneficiary’s name before transferring funds, this measure adds an essential layer of protection against misdirected payments, impersonation attacks, and financial fraud—aligning with global best practices in digital identity verification and payment-system compliance.
Overall, the policy measures underscore the Reserve Bank’s continued commitment to responsible digital innovation. By integrating financial regulation with foundational cyber-law principles such as transparency, data integrity, secure authentication and customer protection, the Reserve Bank aims to strengthen trust in India’s rapidly evolving digital financial ecosystem.
[RBI]