Formulation of Banking Policies

• The Reserve Bank of India (RBI) creates rules governing bank account operations.
• It issues guidelines for opening, maintaining, and closing accounts.
• RBI directives cover savings, current, fixed, and specialized accounts.
• Policies are designed to promote financial stability and inclusion.
• All scheduled banks must comply with RBI’s banking framework.

Implementation of KYC and AML Norms

• RBI enforces Know Your Customer (KYC) procedures for all account holders.
• It mandates Anti-Money Laundering (AML) guidelines for transaction monitoring.
• Banks must verify identity and address before opening accounts.
• KYC updates are required periodically as per RBI norms.
• These measures reduce fraud, identity misuse, and illegal fund flows.

Supervision of Banking Operations

• RBI monitors how banks manage customer accounts and services.
• It conducts audits and inspections to ensure regulatory compliance.
• Guidelines are issued for interest rates, charges, and account features.
• It oversees customer grievance redressal and service standards.
• Non-compliance by banks can lead to penalties and restrictions.

Support for Digital and Inclusive Banking

• RBI promotes digital banking and technology in account access.
• It supports mobile banking, internet banking, and unified payment systems.
• Special accounts like Basic Savings Bank Deposit (BSBD) accounts are regulated by RBI.
• It encourages banks to reach unbanked rural and remote areas.
• Financial literacy initiatives are supported to educate account holders.

Monitoring and Reporting of Transactions

• RBI sets reporting thresholds for high-value or suspicious transactions.
• Banks must report such activities through official systems like STR and CTR.
• It maintains oversight through systems like the Central Repository of Information on Large Credits (CRILC).
• PAN linkage and account number tracking fall under RBI’s purview.
• These controls ensure transparency and national financial security.