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India's banking, forex, and digital payment rule changes take effect

India's banking, forex, and digital payment rule changes take effect

Rule Changes

RBI and finance ministry overhaul deposit pricing, exporter deadlines, and digital evidence rules

Yesterday: Banking, forex, and payments rules take effect

Overview

Updated 1 hour ago

Indian exporters, banks, and millions of customers woke up October 1 to a new financial regulatory regime. The Reserve Bank of India and the finance ministry brought into force a batch of rules covering bulk-deposit pricing, stressed-asset accounting, export proceeds, and digital bank records.

The biggest shift replaces the Bankers' Books Evidence Act of 1891, written for paper ledgers, with a framework that makes digital and cloud-based records admissible in court. Exporters also saw their deadline to bring home earnings cut from 15 months to nine.

Why it matters

Exporters get nine months to bring home earnings, banks disclose bulk deposit rates daily, and digital bank records gain legal standing in Indian courts.

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Key Indicators

9 months
Export realisation window
Cut from 15 months to 9 for most exports under the new FEMA rules.
₹3 crore
Bulk deposit threshold
Deposits above this qualify as bulk; the threshold was raised from ₹2 crore.
5
SBI free monthly ATM transactions
Halved from 10 for salary account holders at other banks' ATMs.
₹2,000
UPI merchant fee threshold
Merchant Discount Rate applies above this amount from October 15.

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Organizations Involved

Timeline

January 2026 October 2026

6 events Latest: Yesterday
Tap a bar to jump to that date
  1. UPI merchant fee framework applies

    Upcoming Regulation

    Merchant Discount Rate applies to UPI transactions above Rs 2,000.

  2. Banking, forex, and payments rules take effect

    Latest Regulation

    Bulk-deposit pricing, stressed-asset accounting, digital evidence, and export rules go live.

  3. RBI shortens export-realisation window

    Regulation

    Amendment cuts ordinary window from 15 to 9 months before rules take effect.

  4. Finance Ministry sets start date

    Statement

    Ministry notifies October 1 as the Act's commencement date.

  5. Bankers' Books Evidence Act passes

    Legislation

    President approves the 2026 Act, replacing the 1891 evidence law.

  6. RBI notifies FEMA 23(R)/2026-RB

    Regulation

    Consolidated export-import regulations set a 15-month export-realisation window.

Scenarios

1

Exporters miss the 9-month window as collections slow

Possible Resolves by Q3 2027

Discussed by: Trade analysts at Indian export promotion councils and banking industry observers

The shortened window tightens cash-collection timelines for exporters, especially those with long supply chains or slow-paying buyers. Exporters already on the RBI caution list as of September 30 get transitional treatment, but new contracts face the nine-month deadline. If a meaningful share of export bills exceed the window, the RBI could extend deadlines or soften enforcement. The first full cohort of exporters hits the nine-month mark in mid-2027.

2

Bulk deposit rates diverge as banks price for funding risk

Likely Resolves by End of 2026

Discussed by: Banking analysts covering Indian lenders

The liquidity coverage ratio-linked framework lets banks price bulk deposits — those above Rs 3 crore — by their liquidity characteristics, so deposits expected to stay longer can command different rates. Banks must disclose rates daily by 10 am and offer uniform pricing for similar deposits on the same date. The transparency requirement could intensify competition for stable funding. Compare disclosed rates across major banks in the months after October.

3

UPI merchant fee above Rs 2,000 reroutes large payments

Uncertain Resolves by Q1 2027

Discussed by: Digital payments analysts and fintech trackers

From October 15, a Merchant Discount Rate applies to UPI merchant transactions above Rs 2,000. Large-ticket merchants — appliance sellers, travel agents, auto dealers — may shift to other payment instruments or renegotiate fees. NPCI transaction data will show whether UPI's share of large merchant payments changes.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

May 2016

India's Insolvency and Bankruptcy Code (2016)

India replaced a patchwork of insolvency laws with the Insolvency and Bankruptcy Code, creating time-bound resolution for stressed companies. The law established the Insolvency and Bankruptcy Board of India and gave creditors a clear process.

Then

Resolution timelines became enforceable and banks gained a tool to process bad loans.

Now

The code reshaped India's credit culture and is credited with cleaning up non-performing assets in the banking system.

Why this matters now

The new Specified Non-Financial Assets framework standardizes how banks account for assets recovered from stressed borrowers, complementing the IBC's stress-resolution machinery.

June 2000

US E-SIGN Act (2000)

The US Electronic Signatures in Global and National Commerce Act made electronic signatures and records legally valid for interstate commerce, ending the requirement for paper documents in most transactions.

Then

E-commerce and digital contracting expanded rapidly.

Now

It set a template for other countries to recognize digital records in law.

Why this matters now

The Bankers' Books Evidence Act 2026 does for Indian banking what E-SIGN did for US commerce: it gives digital and cloud-based records the same legal weight as paper.

1991-1992

India's 1991 banking deregulation

As part of economic liberalization, India deregulated interest rates on deposits and lending, freeing banks to set rates based on market conditions rather than central directives.

Then

Competition for deposits increased across the banking system.

Now

It laid the foundation for market-driven banking that the 2026 bulk-deposit framework extends.

Why this matters now

The new liquidity coverage ratio-linked pricing framework refines this market-driven approach by letting banks price bulk deposits by their liquidity characteristics.

Sources

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