Major changes to Indian banking rules come into effect from August 1, 2025. NRIs in the UAE must act quickly to review old accounts, claim unredeemed funds, and understand the new capital and audit reforms aimed at improving bank governance and safety.
Dubai: Starting August 1, 2025, Indian banking regulations are undergoing significant reforms that may directly affect millions of non-resident Indians (NRIs), especially those residing in the UAE. These changes, introduced under the Banking Laws (Amendment) Act, 2025, aim to strengthen the financial system and modernize banking practices across the country.
Announced recently by India’s Ministry of Finance, the new rules will apply to all nationalised banks, co-operative banks, and the State Bank of India (SBI). UAE-based Indian expats with fixed deposits, dividends, or dormant accounts in India should take note of the following key changes.
Higher Minimum Capital Requirement for Banks
One of the most significant reforms is the increase in minimum capital required for banks. Previously, banks needed to maintain just ₹5 lakh as starting capital. From August 1, this threshold will be raised to ₹2 crore. This shift aims to strengthen the financial base of Indian banks, particularly small cooperative banks that often serve rural and semi-urban populations.
For NRIs investing in these banks, the change signals improved financial stability, especially for those with long-term fixed deposits or savings accounts.
Unclaimed Money to Be Transferred to IEPF
Another crucial change affects unclaimed funds. If you have unclaimed dividends, matured fixed deposits, or unredeemed shares lying idle in your Indian bank account for more than seven years, they will no longer remain with the bank. Instead, they will be transferred to the Investor Education and Protection Fund (IEPF) — a government-run repository designed to handle inactive investor assets.
While you can still claim the money, the process is more formal and must go through the IEPF rather than your bank. This measure is meant to prevent misuse or misplacement of long-forgotten funds.
Audit Rules Aligned with Company Law
Audit regulations for public sector banks like SBI will now follow the same procedures as private companies under Indian corporate law. This means the appointment and functioning of bank auditors will be more regulated and transparent, improving accountability and risk oversight across the banking sector.
For Indian expatriates in the UAE, the changes could have direct implications. Many NRIs maintain dormant accounts, fixed deposits, or investments in Indian banks that have not been touched for years. If any such assets remain unclaimed beyond seven years, retrieving them will involve a more complex process through the IEPF portal.
The increased capital requirement and stricter audits may also affect those planning to invest in co-operative banks or opening new NRE/NRO accounts.
Here are some steps NRIs should consider before the changes take effect:
Review Your Indian Accounts: Check all your bank accounts in India for activity. If you have dividends, deposits, or shares that are inactive, take steps to claim or reactivate them before August 1.
Update Your Bank Records: Make sure your contact information, nominee details, and KYC documents are current and accurate in all your Indian financial accounts.
Act Promptly on Unclaimed Money: If you have matured deposits or unclaimed dividends, it’s best to approach your bank now to retrieve them before they are moved to the IEPF.
Monitor Future Regulations: Stay updated on how the IEPF claim process works in case any funds are transferred after the deadline.
