BACKGROUND
The Reserve Bank of India (RBI) noticed that transgender persons faced difficulties opening bank accounts because the forms made no provision for them, offering only male and female choices. This was despite the Supreme Court’s judgment in National Legal Services Authority v. Union of India (2014) (‘NALSA’), which upheld a transgender persons’ right to self-identify their gender and directed the centre and state to grant legal recognition of gender identity as male, female, or transgender/third gender.
THE CIRCULARS
Two circulars were issued by the RBI in April 2015 to Scheduled Commercial Banks and Urban Co-operative Banks respectively. The RBI directed these banks to include “third gender” in all forms and applications, wherever gender classification is required.
In November 2025, the RBI withdrew all circulars and replaced it with comprehensive Master Directions. So, this rule can now be found in the Responsible Business Conduct Master Directions applicable to the respective kind of financial institutions. It is at paragraph 86 in the Urban Co-operative Banks Directions, paragraph 102 in the Rural Co-operative Banks Directions, paragraph 121 in the Small Finance Banks Directions, paragraph 77 in the Payments Banks Directions and paragraph 121 in the Commercial Banks Directions.
SIGNIFICANCE
The circulars translated a constitutional right recognised in NALSA into a concrete, sector-wide operational change, removing the bureaucratic barrier that had previously forced transgender persons to misgender themselves simply to open a bank account or access basic financial services.
READ THE CIRCULAR TO SCHEDULED COMMERCIAL BANKS HERE (WITHDRAWN)
READ THE MASTER DIRECTIONS TO SCHEDULED BANKS HERE (IN FORCE)