The Reserve Bank of India (RBI) came up with regulatory changes for savings accounts in the year 2025 with the purpose of upgrading security, transparency, and financial inclusion. These changes came into force on April 1, 2025, and are applicable to holders of accounts in public, private, and small finance banks. Considering that India has over 200 crore savings accounts, these changes address respective issues on digital banking, fraud prevention, and customer convenience. Hence, in this article, we discuss the major updates, how they affect account holders, and what steps are necessary for compliance.
Aadhaar-Based KYC Verification
The RBI has made Aadhaar-based KYC verification for all savings accounts mandatory by December 31, 2025. Accounts that exist presently but have not undergone Aadhaar linkage will have their transactions restricted-hence, very little can be withdrawn from or deposited into such accounts, and funds cannot be further transferred. For opening new accounts, Aadhaar is accepted as one of the IDs. Alternatively, PAN or Voter ID may also be given. This increased security decrease the possibility of fraud, a step aligned with the RBI’s objective regarding a unified digital identity framework. Account holders can also update KYC information from the convenience of their homes via the bank’s online portal or opt to go to the branch with self-attested documents.
Interest Rate Modifications
The interest rates of savings accounts shall be reviewed biannually (in April and October) to have a certain measure of stability when economic fluctuations occur. Rates continue to be tiered based on balances: 2.7%-3% for balances of less than ₹1 lakh, 3%-3.5% for ₹1-5 lakh, and up to 4% for balances beyond these limits. Banks calculate interest on the daily balance and credit it quarterly, thus promoting consistent savings. Banks shall also ensure the updated rate is displayed on their websites and inform their customers by way of SMS or email within 15 days after the change.
Dormant Account Provisions
Accounts dormant for 24 months (as against the erstwhile 12 months) shall be treated as dormant giving further relief in premature restrictions. The dormant accounts, henceforth, shall be opened on a reactivation basis, but the concerned bank shall intimate to the customer 90 days prior to such reactivation by voice SMS/ e-mail/ post. Unclaimed deposits after 10 years shall be transferred to Depositor Education and Awareness Fund with claims processes being made available online by 2025, thereby providing a safety net for the depositors vis-à-vis unclaimed funds, estimated at ₹42,000 crore.
Digital Transaction Limits & Charges
To enhance digital banking, the RBI has set increased transaction limits: UPI transfers have now been set at ₹10 lakh on a daily basis (against ₹5 lakh), and RTGS/NEFT transaction limits have now been increased to ₹50 lakh per transaction for savings accounts. However, charges greater than the limits will be levied should one exceed the number of free transactions allowed (for example, five free ATM withdrawals a month). Banks need to display the fee structure clearly; meanwhile, customers can register for SMS alerts to keep track of the usage. Hence, the convenience is balanced with costs.
Enhanced Fraud Protection
New fraud prevention measures require a two-factor authentication for all digital transactions above ₹5,000, which may include biometric authentication or an OTP. Banks are required to resolve fraud complaints within 21 days, including a provisional credit payment to the customer in cases of loss exceeding ₹25,000 during investigation. Customers should report an unauthorized transaction within 72 hours of notice to limit their liability. The RBI’s Inclusivism, with integrated AI-based fraud detection systems, further protects accounts, having the effect of reducing reported fraud cases by 15% in 2024.
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