Fraud Risk Management in banks: mandatory EWS, red flagging, natural justice procedures, and RBI/CFR reporting timelines.
These Directions require banks to adopt a Board approved Fraud Risk Management Policy, establish EWS and Red Flagging frameworks integrated with core systems and analytics, investigate red flagged accounts via internal or external audit, adhere to principles of natural justice (SCN, 21 days, reasoned order), report red flagged accounts meeting CRILC threshold to RBI within seven days and all frauds to RBI via FMRs within 14 days, use the Central Fraud Registry for risk management, complete classification within 180 days, and ensure staff accountability and prescribed reporting to LEAs and other authorities.

Interest Equalization Scheme extended for rupee export credit, with bank participation conditioned on average lending rate compliance and DGFT undertakings.
Extension of the Interest Equalization Scheme until June 30, 2024 continues support for pre and post shipment rupee export credit with differentiated equalization rates and an annual subvention cap measured from April 1, 2023. Banks whose average pre subvention lending rate exceeds the permitted band will be identified by DGFT, must provide a prescribed undertaking to participate, will be restricted from the Scheme until compliance, and face potential debarment on further breaches; DGFT will monitor compliance and require specified documentation.

Fully Accessible Route expands to include sovereign green bonds, enabling non resident investment under FAR conditions.
All Sovereign Green Bonds issued by the Government in fiscal year 2023 24 are designated as specified securities under the Fully Accessible Route, making them eligible for non resident investment on the same unrestricted basis as other FAR securities. The Directions are issued under the Reserve Bank's statutory powers, without prejudice to permissions under other laws, and are applicable with immediate effect.

Wire transfer due diligence: strengthened originator and beneficiary information requirements and risk-based processing obligations for regulated entities.
The amendment requires cross-border wire transfers to carry accurate originator and beneficiary information-originator name, account or unique transaction reference, originator address or national identity/customer identification details, and beneficiary name and account-permits limited originator data for individual transfers within batch files provided the batch contains full traceable information, applies equivalent information rules to qualifying domestic transfers, mandates prompt availability of transfer information to law enforcement and FIU-IND on lawful request, and imposes defined ordering, intermediary and beneficiary regulated entity responsibilities including risk-based policies and suspicious transaction reporting.

Fully Accessible Route now includes sovereign green bonds, permitting non-resident investment under existing FAR conditions.
All Sovereign Green Bonds issued by the Government in fiscal year 2022-23 are designated as specified securities under the Fully Accessible Route, permitting non-resident investment on the same terms as other FAR-eligible central government securities. The Directions are issued under Section 45W, apply with immediate effect, and are without prejudice to permissions required under other laws.

GSTN inclusion as Financial Information Provider enables GST returns to be shared under the Account Aggregator framework.
Inclusion of Goods and Services Tax Network (GSTN) as a Financial Information Provider under the Account Aggregator framework designates GST Returns, specifically Form GSTR 1 and Form GSTR 3B, as recognised financial information to facilitate cash flow-based lending. The Department of Revenue is specified as GSTN's regulator for this purpose, and targeted amendments to the Master Direction add GST returns, the Department of Revenue, and GSTN to the enumerated lists.

Fully Accessible Route expanded to include additional specified government securities, enabling broader non resident investment eligibility immediately.
Two identified government securities and all new issuances of seven year and fourteen year tenors are designated as specified securities under the Fully Accessible Route, thereby making them eligible for non-resident investment on the same terms as domestic investors; the Directions are issued under the Reserve Bank's statutory authority and are effective immediately without prejudice to other legal permissions.

Bank guarantees: issuance, monitoring and prompt honouring required under RBI prudential and compliance safeguards.
Consolidates RBI instructions on issuance, monitoring and honouring of bank guarantees and co acceptances: banks should prioritise financial guarantees, limit maturities (normally ten years), adopt Board approved policies for non constituent non fund facilities with full KYC/AML and credit appraisal, impose internal controls (dual signatures, reporting, periodic reviews), avoid large unsecured guarantees and guarantees enabling placement of funds with NBFCs, ensure prompt payment of invoked guarantees unless court restrained, and follow specific safeguards for export guarantees, overseas JV/WOS exposures, co acceptances and letters of credit while complying with FEMA and prudential norms.

Scale Based Regulation reclassifies NBFCs into layered categories and imposes proportional capital, governance and prudential requirements.
Scale Based Regulation classifies NBFCs into Base, Middle, Upper and Top Layers by size, activity and risk, applies progressively stricter regulations to higher layers, and prescribes layer-specific prudential and governance measures including revised Net Owned Fund minima with glide paths, a >90-day NPA norm with phased compliance, an Internal Capital Adequacy Assessment Process, enhanced capital quality and leverage norms for Upper Layer entities, harmonised concentration limits referenced to Tier I capital, board and disclosure enhancements, Chief Compliance Officer and compensation policies, and transition and supervisory timelines for movements between layers.

Safe deposit locker rules: updated CDD, security standards, nomination and 15 day claim settlement requirements.
Revised regulatory instructions require banks to apply Customer Due Diligence per KYC for locker hirers, maintain transparent allotment with CBS based vacancy and wait lists, adopt Board approved locker agreements, and follow specified rent, relocation and refund rules. Security standards mandate single point vault access, CCTV retention, BIS and Cyber Security Framework compliance for mechanical and electronic lockers, and protection of customer data. Operational controls include visitor logs, privacy during access, alerts to customers, master key custody and surprise verifications. Nomination, inventory and claim settlement procedures require prescribed forms, inventories with witnesses, 15 day settlement on proof of death, SOPs for break open, attachment, disposal and Board approved liability and insurance policies.

Restriction on opening current accounts: banks must follow exposure-based rules and implement changes non disruptively with oversight.
The circular reiterates a restriction on opening current accounts for borrowers with CC/OD facilities and prescribes a graded approach based on banking-system exposure; non-lending banks may open accounts for collection in specified circumstances. Banks are allowed extra time to engage borrowers and resolve operational issues, escalate unresolved matters to the industry association and regulator, extend exemptions for white label ATM operators to Cash-in-Transit and cash replenishment agencies, and implement head office and regional monitoring mechanisms to ensure non-disruptive implementation while maintaining ineligibility for current accounts where borrowers have agricultural/personal ODs or ODs against deposits.

Opening of current accounts: permitted for specified statutory and escrow purposes subject to use restrictions and monitoring obligations.
Banks may open current accounts for specified statute- or regulator-mandated purposes provided the accounts are used only for permitted transactions, flagged in the CBS, and subject to banks' half-yearly monitoring of current accounts and CC/ODs to ensure compliance and to assess the banking system's aggregate exposure, computed using CRILC, CICs, NeSL and customer declaration; banks with less than ten percent exposure have limited debit rights with defined exceptions, escrow arrangements must include lending banks and non-lender banks cannot act as escrow agents.

Dividend suspension: banks barred from paying dividends from the most recent financial year's profits to conserve capital and support lending.
Banks are required to refrain from distributing dividends from the profits of the financial year ending March 31, 2020; the Reserve Bank directs that no dividend payment on equity shares be made from those profits so that banks conserve capital to absorb losses, strengthen balance sheets, and continue supporting lending to the real economy.

Current account discipline deadline extended pending operational FAQs; banks must comply with applicable instructions as clarified.
The Reserve Bank extended the deadline for banks to comply with the Para 4 operational requirements on maintenance of current and CC/OD accounts, pending issuance of a clarifying FAQ addressing banks' operational queries. Banks must meet the applicable instructions by the extended compliance date, and all other directions of the August 6, 2020 circular remain unchanged.

Udyam registration requirement: MSME classification uses written down value for plant and machinery and prior registrations temporarily recognized.
Udyam Registration Certificate is required for MSME classification and lenders may obtain it from entrepreneurs. Existing EM Part II and UAM registrations are temporarily valid and must be refiled on the Udyam portal by the transition deadline; self declaration Udyam certificates for entities exempt from turnover or income filings are temporarily valid. For classification, value of plant and machinery or equipment means Written Down Value at financial year end as defined in tax law, replacing cost of acquisition; earlier RBI guidance on investment valuation is superseded.

Offline retail payments pilot permits connectivity independent transactions with specified operational limits and mandatory real time alerts.
Reserve Bank permits a Pilot Scheme allowing authorised Payment System Operators to provide offline retail payments via cards, wallets or mobile devices without internet connectivity and, at the user's choice, without Additional Factor of Authentication. The scheme requires adherence to EMV contactless standards, real time transaction alerts, specified per transaction and per instrument offline limits with online reset under AFA, acquirer liability for merchant end technical or security issues, notification to the Reserve Bank of solution specifications, and allows third party innovators to operate only through tie ups with authorised PSOs.

Online Dispute Resolution for digital payments mandates system driven, rule based resolution of failed transaction grievances with customer tracking.
PSOs and their PSPs must implement a transparent, rule based Online Dispute Resolution system for failed digital payment transactions, provide multiple customer lodging channels (including in app facilities for third party payment apps), enable automatic fetching of transaction details while protecting data confidentiality, issue unique reference numbers, and furnish tracking; the ODR must adhere to existing turnaround time and compensation requirements and be made accessible to all participating PSPs, with scope to expand later.

Bank current account opening restricted by borrower exposure thresholds, escrow requirements, collection account limits, and CC/OD routing rules.
No bank shall open current accounts for customers who have availed CC/OD; all transactions must be routed through the CC/OD account. Banks with under 10% of system exposure may permit credits but debits only to remit funds to a CC/OD account held with a bank having 10% or more exposure. For borrowers without CC/OD, mandatory escrow applies at Rs.50 crore or more (only escrow bank may maintain current account), while Rs.5-