Online Gaming Ban: Banks Tighten Real-Time Monitoring, RMG Entities Under Scrutiny

With the enactment of the Promotion and Regulation of Online Gaming Act,2025, banks have begun reassessing their dealings with Real Money Gaming (RMG) platforms, enhancing real-time scrutiny of all transactions and payment flows associated with such entities, as per news reports.

Real-Time Payment Monitoring Amplified Post Ban

The Act, effective from August 2025, prohibits facilitation of payments for RMG services, defining them as illegal. Accordingly, banks and payment intermediaries processing related transactions face penalties of up to ₹1 crore and imprisonment of up to 3 years. 

Major financial institutions have responded by tightening their real-time payment monitoring systems to ensure no RMG-linked payments flow through their platforms. This effort is aimed at full compliance and risk mitigation against legal exposure.

Legal Status of RMG Companies and Banking Relationships

Questions surround the banking status of companies offering both money and non-money gaming services. Since many such firms maintain unified bank accounts, identification and isolation of RMG-related activity remains challenging. Banks are engaging with the Reserve Bank of India to seek clarity on whether these hybrid companies must be treated as completely illegal or allowed to maintain relationships for their non-RMG revenue chains.

Read More: Centre Passes Online Gaming Bill 2025, Implementing Complete Ban on Real-Money Games Worth $3.2 Billion!

KYC Compliance and Account Segregation Demands Rise

Institutions are increasingly scrutinising Know Your Customer (KYC) data to assess the legality and legitimacy of transactions. Entities earning full revenue from RMG have already come under direct engagement by banks for termination or restructuring of relationships. Others with diverse income sources have requested time to reconfigure bank accounts to separate prohibited activities. Such segregation may offer limited protection for non-RMG operations.

Uncertainty Persists While Awaiting Government Clarification

The banking sector continues to operate cautiously as it balances regulatory compliance with the operational complexity of these firms. Legal teams across banks are evaluating client portfolios and advising on gradual exits or modifications where applicable, especially as outcomes from possible court challenges are awaited in the coming days.

Conclusion

The online gaming ban has triggered a robust response from Indian banks, compelling them to sharpen transaction surveillance and reassess all ties with RMG entities. While clarity is awaited for dual-business firms, actions are already underway to isolate and disengage from potentially non-compliant clients.

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