The Indian banking landscape is set to undergo remarkable transformations in 2025. These changes are designed to enhance customer convenience, strengthen security protocols, and improve transparency in banking operations. The primary objective of these updates is to encourage the adoption of digital banking, prevent fraudulent activities, and simplify financial transactions. Here is a detailed overview of the key changes you need to know.
Overview of Significant Banking Reforms
| Regulation/Update | Details |
|---|---|
| Closure of Dormant Accounts | Accounts with prolonged inactivity and zero balance will be deactivated. |
| ATM Transaction Fees | Increased fees for transactions exceeding the free monthly limit. |
| Savings Account Interest Rate | Revised interest rate raised to 3.5%. |
| Minimum Balance Requirement | Increased minimum balance limits across various banks. |
| Digital Banking Expansion | Improved mobile and online banking services with enhanced security. |
| Fixed Deposit (FD) Norms | New withdrawal policies for NBFCs and HFCs. |
| UPI Transaction ID Update | Only alphanumeric characters will be permitted in transaction IDs. |
Closure of Dormant and Zero Balance Accounts
The Reserve Bank of India (RBI) has directed banks to deactivate dormant and zero balance accounts to reduce fraudulent activities and enhance security.
- Affected Accounts:
- Dormant Accounts: Accounts with no transactions over an extended period.
- Zero Balance Accounts: Accounts with no maintained balance.
- Recommended Action:
- Carry out regular transactions to maintain account activity.
- If your account is closed, visit your bank branch for reactivation procedures.
Revised ATM Withdrawal Charges
Starting from 1 February 2025, ATM withdrawal fees have been increased:
- Free Transactions: Limited to three transactions per month.
- Fees Beyond Free Limit:
- Transactions from home bank ATMs: ₹25 per transaction.
- Transactions from other banks’ ATMs: ₹30 per transaction.
- Withdrawal Limit: Daily cash withdrawal capped at ₹50,000.
Updated Savings Account Interest Rates and Minimum Balance Requirements
- Interest Rates:
- General Savings Accounts: Increased from 3% to 3.5%.
- Senior Citizens: Additional 0.5% interest.
- Minimum Balance Limits:
- State Bank of India (SBI): ₹5000 (previously ₹3000).
- Punjab National Bank (PNB): ₹3500 (previously ₹1000).
- Canara Bank: ₹2500 (previously ₹1000).
Expansion of Digital Banking Facilities
Banks are advancing their digital platforms to offer seamless and secure online services:
- Enhanced Services:
- Mobile banking apps and online banking portals enriched with new features.
- Security Measures:
- Multi-Factor Authentication (MFA) is now mandatory for online transactions.
Revised Fixed Deposit (FD) Policies
RBI has introduced new guidelines for Fixed Deposits (FDs) under Non-Banking Financial Companies (NBFCs) and Housing Finance Companies (HFCs):
- Small Deposits (<₹10,000): Withdrawals allowed without interest within three months.
- Large Deposits (>₹10,000): Partial withdrawals are restricted.
- Emergency Withdrawals: Full withdrawals permitted in cases of critical illness.
Changes to UPI Transaction ID Standards
To standardize transactions and enhance security, UPI transaction IDs will now accept only alphanumeric characters (a-z, 0-9). Special symbols like @, #, $ will no longer be allowed.
Additional Noteworthy Updates
- Income Tax Exemption & TDS Limits:
- Income tax exemption raised to ₹12 lakh in the Union Budget 2025.
- TDS Limits:
- Senior Citizens: ₹1 lakh.
- General Public: ₹50,000.
- Credit Information Updates:
- Credit data will now be refreshed every 15 days, ensuring more accurate and timely financial assessments.
Conclusion
The banking reforms scheduled for 2025 are poised to make India’s banking system more secure, transparent, and customer-friendly. While these updates bring several benefits, it is crucial for customers to stay informed and ensure their accounts comply with the new requirements.
Disclaimer: This article is based on official RBI guidelines. Please consult your bank or financial advisor for precise information before making any banking decisions.
