RBI Brings Big Changes: For Banks, Consumers, and Trade

• RBI wants banks to plan better for risky loans. A new system called Expected Credit Loss will replace the old method.
• New rules under Basel III will make Indian banks follow global standards for handling credit risk.
• Deposit insurance (the safety net that protects people’s money in banks) will now be risk-based. Stronger banks will pay less insurance premium.
• Banks will now have more freedom to lend against shares, REITs, and listed bonds. They can even finance corporate acquisitions.
• Old rules from 2016 on large borrowers will be scrapped since they are no longer useful.
• NBFCs will get new, fairer rules for lending to infrastructure projects.
• After 20 years, RBI may allow new Urban Co-operative Banks to be set up.
• To reduce confusion, RBI will merge hundreds of old circulars into simpler master rules.

Easier Rules for Exporters and Importers

• Exporters using IFSC accounts now have 3 months instead of 1 to bring back foreign currency.
• Time for merchant trade deals increased to 6 months, giving businesses more breathing space.
• Small exporters/importers (with bills up to ₹10 lakh) will have easier paperwork with simple self-declarations.
• External commercial borrowing rules will be made lighter, with more lenders and borrowers allowed.
• Foreign businesses setting up offices in India will face simpler, principle-based rules.

• Basic zero-balance accounts will be upgraded to match digital needs but remain affordable.
• Bank Ombudsmen inside banks will now have the power to give compensation and directly talk to customers.
• The RBI Ombudsman Scheme will now also cover State and District Co-operative Banks, giving rural customers more access to complaint redress.

What’s New in Financial Markets

• Indian banks can now lend in rupees to Bhutan, Nepal, and Sri Lanka, helping trade with neighbors.
• More foreign currencies will get reference rates, making forex trading easier.
• Balances in Special Rupee Vostro Accounts (SRVA) can now also be invested in corporate bonds and commercial papers, not just government securities.

Why This Matters
These changes mean:

• Banks will be stronger and safer.
• Customers will get faster and fairer complaint solutions.
• Exporters and importers will find it easier to do business.
• India’s currency (the rupee) will play a bigger role in world trade.

[Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the editorial stance of this publication.]