What changed
RBI formalized the Reserve Bank of India (Regional Rural Banks – Digital Banking Channels Authorisation) Directions, 2025, replacing earlier ad-hoc approvals. The directions define digital banking channels, set eligibility criteria for view-only and transactional facilities, and mandate prior RBI authorization for transactional digital banking. They also require RRBs to have board-approved policies for digital channels, including risk management.
What it means for you
RRBs now have a clear regulatory framework to expand digital banking, but must first meet prudential and technological prerequisites. View-only services are easier to launch, but transactional services need RBI nod, which may slow rollout. Banks must invest in CBS, IPv6, and robust policy frameworks to comply. This could widen the digital divide between larger and smaller RRBs.
What you must do
- Assess your RRB's current CBS and IPv6 readiness to offer view-only digital banking from Jan 1, 2026.
- Draft or update board-approved digital banking policies covering liquidity and operational risks.
- For transactional digital banking, prepare and submit authorization application via PRAVAAH portal well in advance.
- Train compliance and IT teams on the new definitions and eligibility criteria for digital channels.
- Review existing digital banking offerings to ensure they align with the new view-only vs transactional classification.
Who it affects
All Regional Rural Banks (RRBs) in India, RRB IT and digital banking teams, RRB compliance and risk management departments, Sponsor banks of RRBs, RBI's Department of Regulation (for processing authorizations)
What is the effective date of these directions?
The directions come into effect from January 1, 2026.
Can an RRB offer transactional digital banking without RBI approval?
No, transactional banking facility requires prior authorization from RBI via the PRAVAAH portal. View-only facility can be offered by eligible banks without prior approval.
What are the eligibility criteria for providing view-only digital banking?
An RRB must have implemented Core Banking Solution (CBS) and enabled its public-facing IT infrastructure to handle Internet Protocol Version 6 (IPv6) traffic.