RBI Withdraws 2021 Circular on Bank Grievance Redress Mechanism

Circular no. RBI/2025-26/207 CO.CEPD.PRS.No.S1121/13-01-008/2025-2026; Dated: 11.02.2026

The Reserve Bank of India (RBI) has issued a circular reviewing and withdrawing its earlier circular dated 27 January 2021 titled “Strengthening of grievance redress mechanism in banks.”

1. Background of the Withdrawal

The withdrawal has been undertaken in light of:

• Subsequent regulatory developments
• Enhanced supervisory frameworks
• Evolution of customer protection mechanisms within the banking system

The RBI has reassessed the regulatory landscape and determined that the earlier circular is no longer required in its existing form.

2. Clarification on Continuing Obligations of Banks

The RBI has expressly clarified that:

• The withdrawal is without prejudice to banks’ existing obligations
• Banks must continue to maintain an effective customer grievance redress mechanism
• Institutions are required to continuously strengthen their internal grievance redress systems

Thus, the withdrawal does not dilute the fundamental responsibility of banks toward customer protection.

3. Regulatory Intent

The move reflects RBI’s intent to:

• Streamline regulatory instructions
• Avoid duplication in light of updated supervisory practices
• Maintain a principle-based approach to customer grievance handling

4. Key Takeaway

While the 27 January 2021 circular stands withdrawn, banks remain fully responsible for ensuring robust, transparent, and efficient grievance redress mechanisms, in line with RBI’s broader customer protection framework.

Click Here To Read The Full Circular