RBI proposes a 60-day cap on temporary debit holds for bank accounts suspected of money mule activity or cyber fraud.

The draft rule is part of the RBI (Know Your Customer) Amendment Directions, 2026. It’s the central bank’s attempt to give every bank the same rulebook, rather than leaving each one to decide on its own how long a suspicious account stays frozen.

The trigger for the draft goes back to the courts. On August 4, 2026, the Supreme Court directed the RBI to draw up a standard operating procedure for money mule cases, and this proposal is the response.

Here’s the mechanism. A bank’s fraud-detection system, which can run on AI, flags a transaction worth ₹1,000 or more as suspicious.

The bank can then place a hold on that amount, or on the whole account. It has to tell the customer straight away by SMS or email.

If only a postal notice is possible, that has to go out by the next working day. From there, the clock starts running. The account holder gets 20 days to explain the transaction.

If they do respond, the bank must decide within 10 days. If nobody responds, the bank has 30 days to make its own call.

Choosing to keep the freeze going means reporting the case to the police through the government’s cybercrime portal, and the hold lifts automatically on day 31 unless investigators say otherwise.

Coverage isn’t limited to the big banks. Small finance banks, payments banks, regional rural banks and urban cooperative banks all fall under the same draft.

One thing the rule doesn’t do is single out debit cards specifically; it deals with account and transaction-level holds instead, and full account freezes are meant to be a last resort, not the default.

Banks will still have to file Suspicious Transaction Reports as usual. If the draft goes through unchanged, it takes effect from April 1, 2027, though banks are free to adopt it sooner.

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