As we approach April 1, 2025, several significant banking regulations are set to take effect in India. These changes aim to enhance financial inclusion, improve transaction security, and streamline banking operations. Here’s a comprehensive overview to help you navigate the upcoming shifts:

1. Revised Priority Sector Lending (PSL) Guidelines

The Reserve Bank of India (RBI) has updated its PSL guidelines to ensure a more targeted allocation of credit to vital sectors of the economy. Key modifications include:​Business News Today+2Reddit+2Reuters+2

• Enhanced Loan Limits: Increased limits for housing loans and broader eligibility for renewable energy projects.​Reuters+1Business News Today+1
• Urban Cooperative Banks: The PSL target for these banks has been raised to 60% of their adjusted net bank credit or credit equivalent of off-balance sheet exposures, whichever is higher.​Reuters
• Weaker Sections: An expanded list of eligible borrowers under this category, with the removal of caps on loans to individual women beneficiaries by urban cooperative banks.​Reuters

These adjustments aim to facilitate better credit flow to priority sectors, fostering inclusive economic growth. ​Business News Today+2Reddit+2Reuters+2

2. Unified Payments Interface (UPI) Security Enhancements

To bolster the security and efficiency of UPI transactions, the National Payments Corporation of India (NPCI) has introduced new directives:​Goodreturns+2The Times of India+2The Economic Times+2

• Mobile Number Verification: Banks and Payment Service Providers (PSPs) are required to update their databases weekly using the Mobile Number Revocation List/Digital Intelligence Platform (MNRL/DIP). This measure aims to reduce errors from recycled or changed mobile numbers. ​The Times of India+1The Economic Times+1
• User Consent for Numeric UPI IDs: Explicit user consent is now mandatory before assigning or updating numeric UPI IDs, enhancing user control and reducing transaction errors. ​The Economic Times+1The Times of India+1
• Deactivation of Dormant UPI IDs: UPI IDs inactive for over 12 months will be disabled to prevent fraud. Regular use of UPI services is recommended to keep accounts active. ​Goodreturns+1The Economic Times+1

3. Changes in Credit Card Benefits

Several banks, including SBI, IDFC First Bank, and Axis Bank, are revising the perks associated with their co-branded Vistara credit cards. Benefits such as complimentary flight tickets, milestone rewards, and renewal bonuses are being discontinued. Cardholders should review the updated terms to understand the impact on their rewards and usage. ​Goodreturns

4. ATM Withdrawal Limits and Charges

Banks are tightening ATM withdrawal policies:​Goodreturns

• Free Transactions: Customers will now have only three free transactions per month at ATMs of other banks.​Goodreturns
• Charges for Exceeding Limits: Exceeding this limit will incur charges ranging from ₹20 to ₹25 per transaction. Planning withdrawals to minimize fees is advisable. ​Goodreturns

5. Clarification on Bank Working Days

Recent rumors suggested that banks would operate only five days a week starting April 2025. However, the Press Information Bureau (PIB) has debunked this claim, confirming that no such regulation has been issued by the RBI. Banks will continue their existing schedules until any official announcements are made. ​India TV News+1The Economic Times+1The Economic Times+1India TV News+1

6. Enhanced Digital Security Measures

In response to rising digital frauds, the RBI is introducing secure website domain names for banks and non-bank financial entities. The domains ‘bank.in’ and ‘fin.in’ will be exclusively available, with registrations starting in April 2025. This initiative aims to prevent phishing attacks and enhance online security for consumers. ​Reuters

Staying informed about these changes will help you manage your finances effectively and avoid potential inconveniences. For personalized advice, consider consulting with your bank or a financial advisor.

Key Banking Updates Effective April 1, 2025