The Reserve Bank of India (RBI) on November 28, 2025, released the Reserve Bank of India (Small Finance Banks – Miscellaneous) Directions, 2025 for public comments. Issued under Sections 26A (1) & (5), 35A, and 53A of the Banking Regulation Act, 1949, these directions consolidate a range of regulatory and operational provisions applicable to Small Finance Banks (SFBs). The seeks to ensure sound governance, effective depositor protection, and strengthened compliance mechanisms within SFBs.
The directions cover multiple functional areas such as the Depositor Education and Awareness (DEA) Fund, Board responsibilities, financial conduct, and regulatory compliance. They mandate SFBs to transfer unclaimed deposits and related balances remaining inoperative for ten years or more to the DEA Fund, with clear procedures for refund, registration under the e-Kuber system, and interest calculation. The Board of Directors is required to formulate policies on donations, employee certifications, and mandatory leave, besides conducting periodic reviews. Provisions also cover ATM facility extension to Kisan Credit Card holders, legal compliance, and FATCA registration obligations.
Further, the directions prohibit SFBs from associating with private financiers, unincorporated bodies, prize chit schemes, or lottery sales, while permitting donations only for approved public or charitable purposes. They also outline rules on training, capacity building, taxation compliance, and operational governance, ensuring holistic oversight of SFBs’ business and conduct. These consolidated directions aim to streamline disparate regulatory instructions and foster prudent, transparent, and compliant banking practices.
[Notification No. RBI/DOR/2025-26/204 DoR.SOG(SPE).REC.No.123/13-04-001/2025-26]
