RBI’s 15-Day Banking Rule: Ensuring Faster Claim Settlements and Enhanced Customer Experience

REEDLAW Legal News Network | 12 October 2025 | 🔗 Find Shareable Link at the End

REEDLAW Legal News Network reports: In a landmark reform initiative, the Reserve Bank of India (RBI) introduced in August 2025 a regulation mandating all banks to process key customer requests and claim settlements within 15 calendar days, with full implementation slated for January 2026. The directive covers core banking services such as account modifications, loan processing, dispute resolution, fund transfers, and settlements relating to deceased customers’ accounts and lockers. This measure aims to promote greater transparency, accountability, and customer satisfaction across the banking system.

The Reserve Bank of India (RBI) announced in August 2025 a landmark regulation mandating all banks to complete key customer requests and claim settlements within 15 calendar days, with full implementation expected by January 2026. This comprehensive regulation covers a wide range of banking activities such as account modifications, new account openings, loan approvals, dispute resolutions, fund transfers, and, importantly, settlement of claims on deceased customers’ accounts and safe deposit lockers.

This 15-day rule marks a pivotal advancement in customer-centric governance within India’s financial ecosystem. By setting a definitive timeline for both individual and corporate service requests, the RBI has sought to eliminate systemic delays and uncertainty in day-to-day banking operations. The initiative mandates the timely execution of customer services, ensuring faster resolutions, and reinforcing trust in financial institutions.

This 15-day rule marks a significant step in enhancing transparency, accountability, and customer satisfaction in the Indian banking sector. For the first time, both individual and corporate customers are assured a fixed timeframe for service requests and claim settlements, reducing delays and uncertainties in managing financial affairs.

Scope and Key Features of the 15-Day Rule

Under the new guidelines, banks must process requests such as account updates, complaint resolution, loan application processing, and fund transfers within 15 calendar days from receiving complete applications. This replaces previously extended timelines that often left customers waiting without clear resolution dates. For deceased customers, banks are required to settle claims on deposit accounts and lockers promptly, ensuring faster transfer of funds and assets to legal heirs or nominees.

The RBI has standardised claim procedures through uniform forms and documentation requirements. For accounts with registered nominees or survivorship clauses, claimants need only submit a claim form, the death certificate, and identity/address proof. Where no nomination exists, simplified settlement processes apply for claims up to a threshold amount (minimum ₹15 lakh), requiring additional documents such as indemnity bonds and no-objection letters. Claims exceeding this limit mandate legal heir or succession certificates.

Penalties and Accountability

To deter delays, the RBI introduced penalty provisions whereby banks must pay interest at Bank Rate plus 4% per annum for delayed deposit claims. For locker or safe custody claims, a penalty of ₹5,000 per day applies for each day of delay beyond the stipulated 15-day period. These measures ensure banks remain accountable and incentivise the timely completion of processes.

Impact on Loan Processing and Customer Service

The 15-day rule necessitates that banks expedite loan application review, document verification, credit evaluation, and decision communication, enabling borrowers to secure funding quickly while banks maintain robust credit assessments. This rule challenges banks to innovate through automation and digital workflows to meet demanding timelines, which benefits customers with faster service and fewer uncertainties.

Operational and Compliance Challenges

Banks face significant challenges in implementing these reforms, including system upgrades, enhanced interdepartmental coordination, staff retraining, and real-time monitoring to comply consistently. Institutions failing to meet deadlines risk financial penalties and reputational damage, driving a broader industry push towards modernisation and better customer communication strategies.

Customer Benefits and Practical Guidance

Customers now experience reduced waiting times, streamlined account management, such as faster account openings or closures, and increased transparency through regular updates during the service process. To fully benefit, customers are advised to keep track of submission dates, retain copies of correspondence, and assert their rights under the new regulation if delays occur.

Future Outlook

The RBI’s 15-day rule is expected to catalyse rapid digitisation and customer-centric transformation in the banking sector. Banks embracing artificial intelligence, automation, and data-driven decision-making will enhance service quality and competitiveness. For customers, this new framework promises a more efficient, responsive, and trustworthy banking experience, paving the way for continued reforms focused on customer protection and service excellence in India.

The RBI’s 15-day deadline regulation is a historic step towards fostering a modern, transparent, and accountable banking environment that respects customer rights and expedites essential banking services.