The Reserve Bank of India (RBI) on Friday announced a major overhaul of bank licensing norms as part of its consolidation of 244 regulatory directions. Deputy Governor Shirish Chandra Murmu confirmed that all existing licensing rules—previously spread across multiple circulars, notifications and guidelines—have now been merged into a single, simplified framework.
The move is part of RBI’s broader effort to streamline and modernise India’s regulatory ecosystem. Until now, bank licensing norms were dispersed across several documents issued over many years, resulting in overlaps, ambiguities and compliance challenges for new applicants.
What the simplification means
According to the RBI:
- The new unified licensing framework removes duplication and harmonises all rules in one place
- The simplified structure is expected to make the application and approval process more transparent
- All categories of banking entities—universal banks, small finance banks, payments banks and foreign banks—will now follow a more standardised set of guidelines
- The consolidation also ensures consistency across prudential norms, ownership guidelines, fit-and-proper criteria and promoter requirements
The updated licensing norms form part of the 244 consolidated regulations that come into effect today. RBI said the changes will make regulatory compliance easier, particularly for new entrants and financial institutions looking to expand banking services.
More details are expected to be published on the RBI website as part of the complete set of consolidated directions.
