August 1: Important financial rules change from tomorrow
August 1: Several important rules are set to change in India from August 1, 2025, impacting various aspects of finance, banking, and daily life. Here’s a summary of the key changes:
1. Major UPI (Unified Payments Interface) Changes:
The National Payments Corporation of India (NPCI) is implementing significant changes to UPI usage rules, aiming to improve efficiency, security, and reduce server load. These include:
Balance Enquiry Limits: Users will be able to check their account balance through UPI a maximum of 50 times per app per day. This is for manual, user-initiated requests, with apps no longer allowed to run background balance checks.
List Account API Restriction: The feature that displays all linked bank accounts will be capped at 25 requests per user, per app, per day.
Scheduled Autopay Execution and Retry Cap: Recurring mandates (like utility bills, OTT subscriptions, EMIs) will now execute only during designated non-peak time slots (e.g., before 10 AM, 1-5 PM, and after 9:30 PM). Each mandate will be limited to a maximum of four total attempts (1 original + 3 retries).
Inactive UPI ID Deactivation: Any UPI ID linked to a mobile number inactive for over 12 months will be automatically disabled to prevent misuse.
Stricter Bank Account Verification: New bank accounts added to UPI will undergo enhanced verification.
Reduced API Response Time: Core UPI APIs must now respond within 10 seconds (down from 30 seconds).
UPI through Credit Lines (Effective August 31, 2025): Users will be able to make UPI payments and withdrawals using pre-approved credit lines (from banks or NBFCs) with daily limits: Rs 1,00,000 for payments, Rs 10,000 for cash withdrawals, and 20 P2P transfers.
2. Banking Laws (Amendment) Act, 2025 Provisions:
Several key provisions of the Banking Laws (Amendment) Act, 2025, notified on April 15, 2025, will come into effect from August 1, 2025. These aim to enhance bank governance, safeguard depositors and investors, and improve audits:
Higher Threshold for “Substantial Interest”: The definition of “substantial interest” for directorships in cooperative banks will increase from Rs 5 lakh to Rs 2 crore.
Extended Director Tenures in Cooperative Banks: The maximum tenure for directors (excluding chairperson and whole-time directors) in cooperative banks will increase from 8 to 10 years, aligning with the 97th Constitutional Amendment.
Transfer of Unclaimed Funds to IEPF: Public sector banks (PSBs) will now be permitted to transfer unclaimed shares, interest, and bond redemption amounts to the Investor Education and Protection Fund (IEPF).
Remuneration for Statutory Auditors: PSBs are empowered to offer remuneration to statutory auditors, aiming to facilitate the engagement of high-quality audit professionals.
3. Changes in Market Repo and Tri-Party Repo (TREP) Trading Hours:
The Reserve Bank of India (RBI) has extended trading hours for market repo and TREP operations by one hour. The new timings will be 9 AM to 4 PM (previously 9 AM to 3 PM). This aims to improve liquidity and flexibility in the short-term money markets.
4. Potential Fuel Price Revisions:
Prices of LPG cylinders, CNG, PNG, and Aviation Turbine Fuel (ATF) are reviewed monthly. Consumers can expect potential revisions in these prices from August 1, which could impact household budgets and transport costs.
5. Bank Holidays:
While August 1st itself isn’t a national bank holiday, August has several regional bank holidays. It’s advisable to check the RBI’s state-wise calendar for specific closures to avoid delays in banking tasks.
These changes highlight a continued push towards digital transformation, financial sector strengthening, and consumer protection in India.
