Supreme Court Mandates Barrier-free Banking for Disabled Persons; RBI Issues Compliance Circular

Moneylife Digital Team 14 August 2025

Consumer Interest

In a significant step toward inclusive banking, the Supreme Court (SC) has directed that persons with disabilities (PwDs) must be given equal, barrier-free access to financial services, and that know-your-customer (KYC) processes should be adapted to accommodate their needs without discrimination. Reserve Bank of India (RBI) asked all regulated entities, including banks, non-banking finance companies (NBFCs), financial institutions (FIs) and financial services providers, to comply with the apex court's directions.

The 30 April 2025 order came in response to petitions highlighting the difficulties faced by disabled individuals in opening bank accounts, updating KYC details and accessing other banking services due to rigid norms and lack of sensitivity from institutions. The Court observed that such barriers violate the Rights of Persons with Disabilities Act, 2016, as well as constitutional guarantees of equality.

In the order, the bench of justice JB Pardiwala and justice R Mahadevan says, "Bridging the digital divide is no longer merely a matter of policy discretion but has become a constitutional imperative to secure a life of dignity, autonomy and equal participation in public life. The right to digital access, therefore, emerges as an intrinsic component of the right to life and liberty, necessitating that the State proactively design and implement inclusive digital ecosystems that serve not only the privileged but also the marginalised, those who have been historically excluded."

The apex court says that banks and financial institutions cannot refuse services or demand additional, non-mandatory documents solely because a customer has a disability. It directed that facilities such as home visits, accessible digital platforms and assistive technologies must be provided where required, and staff must be trained to handle KYC formalities for disabled persons with sensitivity and in full compliance with the law.

Financial inclusion, the Court said, is a fundamental part of social inclusion and the right to open and operate a bank account is integral to the dignity and independence of persons with disabilities.

Following the judgement, RBI issued a circular to all regulated entities, including commercial banks, cooperative banks, NBFCs, payment banks and other financial service providers, instructing them to immediately review and modify their KYC policies in line with the Supreme Court’s directions.

RBI has also asked institutions to develop standard operating procedures for handling KYC for PwDs, roll out staff sensitisation programmes, and submit quarterly compliance reports. It also warned that failure to implement the order will attract supervisory action and penalties.

Disability rights advocates have welcomed the ruling as a landmark step towards ending systemic discrimination in the financial sector. They point out that despite earlier RBI guidelines on inclusion, many persons with disabilities continued to face rejection or excessive procedural hurdles.

Experts say that while banks may need to make initial adjustments, the move will help broaden the customer base and improve the sector’s standing on accessibility and inclusivity.

With the Supreme Court’s directions now backed by RBI’s enforcement powers, the responsibility lies with the financial industry to ensure no one is denied banking access due to disability-related barriers.

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