The Reserve Bank of India has consolidated guidelines for local area banks related to customer protection in digital banking. This aims to enhance accountability in electronic transactions.
RBI Updates Responsible Business Conduct Directions for LABs
On June 24, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Local Area Banks - Responsible Business Conduct) Third Amendment Directions, 2026. The focus of this amendment is on customer protection concerning unauthorized electronic banking transactions.
The consolidated guidelines outline the responsibilities of local area banks (LABs) in limiting customer liability and ensuring accountable handling of electronic transactions. This enhancement is expected to build greater customer confidence in local area banking services.
Practitioners working with LABs should ensure they are updated on these consolidated directives to guide their clients appropriately regarding compliance with electronic transaction liabilities and safeguarding customer interests.
