RBI Drafts Rules to Freeze Accounts Linked to Cyber Fraud
RBI has proposed rules letting banks place temporary debit holds on accounts suspected of money-mule or cyber-fraud activity.
Deadline for the public — including individual consumers — to submit feedback on these draft rules before they are finalised
Key Takeaways
No immediate action is required — these are draft rules, not final directions, and the freeze powers are not yet in effect.
If you regularly receive transfers from multiple unknown sources (e.g., via UPI or IMPS), speak to your bank branch now to document the legitimate purpose — this is the pattern banks will be trained to flag.
Once final rules are issued, if your account is frozen incorrectly, raise a grievance with your bank first, then escalate to the RBI Ombudsman at sachet.rbi.org.in with transaction records and any freeze notice as evidence.
RBI has proposed rules letting banks place temporary debit holds on accounts suspected of money-mule or cyber-fraud activity.
Here's what happened: RBI has released a draft amendment to its KYC Directions, 2025, proposing rules that allow banks to place temporary debit holds on accounts or specific amounts linked to money-mule activity or cyber-enabled financial fraud.. The draft was issued in compliance with a Supreme Court order dated August 4, 2026, which directed RBI to create and circulate a Standard Operating Procedure (SOP) for banks to follow in such cases.. Public comments and feedback on the draft can be submitted until October 2, 2026, after which RBI will review responses and issue final directions separately for each category of regulated entity..
What you should do: No immediate action is required — these are draft rules, not final directions, and the freeze powers are not yet in effect.. If you regularly receive transfers from multiple unknown sources (e.g., via UPI or IMPS), speak to your bank branch now to document the legitimate purpose — this is the pattern banks will be trained to flag.. Once final rules are issued, if your account is frozen incorrectly, raise a grievance with your bank first, then escalate to the RBI Ombudsman at sachet.rbi.org.in with transaction records and any freeze notice as evidence..
This draft affects every account holder at any Commercial Bank, Small Finance Bank, Payments Bank, Regional Rural Bank, Local Area Bank, or Urban Cooperative Bank in India — which covers virtually all salaried employees with a standard savings or salary account. People who frequently receive peer-to-peer transfers, operate small home businesses through personal accounts, or help family members route money through their accounts are at higher risk of being flagged under the proposed criteria. Fixed deposit accounts and loan accounts are not the focus of this draft — the rules specifically target transactional (debit-capable) accounts suspected of facilitating fraud.
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- [1]“RBI invites comments on the Draft “Reserve Bank of India (Know Your Customer) Amendment Directions, 2026”” PRESS RELEASES FROM RBI · 11 Sept 2026
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