RBI invites comments on the Draft “Reserve Bank of India (Know Your Customer) Amendment Directions, 2026”
Distilled Policy Brief
- The proposed regulations amend existing instructions under the KYC Directions, 2025 and apply across all Commercial Banks—including Small Finance Banks, Payments Banks, Regional Rural Banks, and Local Area Banks—as well as Urban Cooperative Banks.
🎯 Prelims High-Yield Examination Points
Note that the RBI's draft SOP on temporary debit holds for money-mule accounts covers Commercial Banks (including Small Finance Banks, Payments Banks, RRBs, Local Area Banks) as well as Urban Cooperative Banks.
⚖️ Mains Analytical & Syllabus Linkages
Analyze how institutionalizing Standard Operating Procedures (SOPs) for temporary debit holds on money-mule accounts addresses cyber-enabled financial fraud while safeguarding legitimate banking operations.
🎯 UPSC Prelims Practice Drill
With reference to the draft Reserve Bank of India (Know Your Customer) Amendment Directions, 2026, consider the following statements: 1. The draft directions propose a Standard Operating Procedure (SOP) for placing temporary debit holds on accounts linked to money-mule activity pursuant to directions from the Supreme Court of India. 2. The proposed directions apply to all Commercial Banks—including Small Finance Banks, Payments Banks, and Regional Rural Banks—as well as Urban Cooperative Banks. Which of the statements given above is/are correct?
- [A] 1 only
- [B] 2 only
- [C] Both 1 and 2
- [D] Neither 1 nor 2
▶ Reveal Official Answer & Analytical Explanation
Both statements are correct. Statement 1 is correct as the Reserve Bank issued the draft directions following a Supreme Court order directing it to adopt and circulate a Standard Operating Procedure (SOP) for placing temporary debit holds on accounts linked to money-mule activity and cyber-enabled financial fraud. Statement 2 is correct as the consolidated draft amendment directions apply to all Commercial Banks (including Small Finance Banks, Payments Banks, Regional Rural Banks, and Local Area Banks) and Urban Cooperative Banks.
🏛️ Historical Twin PYQ Anchor (2021)
Consider the following statements regarding the "National Clean Air Programme (NCAP)": 1. It is implemented by the Ministry of Environment, Forest and Climate Change. 2. Central Pollution Control Board acts as the sole regulatory executive body.