What the New Framework Covers
The Digital Banking Channels Authorisation system covers all electronic delivery channels through which banks interact with customers — internet banking, mobile banking apps, USSD-based banking for feature phones, SMS banking, and any other digital channel. The framework establishes eligibility requirements, governance standards, and ongoing compliance requirements that banks must satisfy to receive and retain authorisation.
Banks that were already operating these channels prior to January 1, 2026 are required to obtain authorisation within a specified transition period. New banks or new channel launches require prior RBI authorisation before going live.
Five Governance Requirements for Authorisation
Banks must have a comprehensive Board-approved policy covering all digital channels — governance structure, risk appetite for digital channels, customer onboarding standards, and escalation protocols for digital incidents.
Upgraded authentication requirements for digital payments and banking transactions. Multi-factor authentication is mandatory across all channels. Biometric-based authentication is encouraged for high-value transactions.
Enhanced liquidity assumptions for digital deposits — recognising that digital deposits can be withdrawn at scale faster than traditional deposits. Stress testing must model digital deposit flight scenarios.
Core banking infrastructure must be ring-fenced from digital channel layers. This has significant implications for banks with monolithic architectures — a separation of concerns that many older core banking systems were not designed for.
Banks that do not currently meet all requirements must prepare a Board-approved restructuring plan by March 31, 2026, with a clear roadmap to full alignment by March 31, 2028.
What This Means for NBFCs Running Digital Lending Platforms
While the Digital Banking Authorisation framework applies directly to banks, NBFCs operating as Lending Service Providers (LSPs) for banks, or running their own digital lending apps, face indirect obligations. Banks that partner with NBFCs for digital customer acquisition and loan origination must ensure their LSP arrangements comply with the new channel governance standards.
NBFCs should review their LSP agreements with partner banks to confirm that their digital channel integrations align with the new framework. Banks will increasingly require NBFCs to meet enhanced data security, authentication, and governance standards as a condition of LSP arrangements.
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