Reserve Bank of India (Commercial Banks – Credit Risk Management) – Amendment Directions, 2026

RBI/2025-26/173
DOR.CRE.REC.374/07-02-001/2025-26
 

January 05, 2026

Reserve Bank of India (Commercial Banks – Credit Risk Management) – Amendment Directions, 2026

In exercise of powers under Sections 21 and 35A of the Banking Regulation Act, 1949, and in public interest, the Reserve Bank of India has issued Amendment Directions to the Reserve Bank of India (Commercial Banks – Credit Risk Management) Directions, 2025.

The amendments mainly revise definitions (including related party, related person, control, KMP, promoter, specified employees, lending, etc.), strengthen Board-approved credit risk policies, and introduce a comprehensive regulatory framework for lending to related parties. This includes materiality thresholds, aggregate and sub-limits, mandatory Board/Committee approvals, recusal of interested persons, enhanced monitoring, whistle-blower safeguards, and strict prohibitions on lending to promoters, major shareholders and entities under their control, subject to limited exceptions.

Certain earlier statutory and regulatory provisions have been deleted and replaced with detailed principles, prohibitions, approval processes, monitoring mechanisms and enforcement actions for related party lending.

These amendments shall come into force from 1 April 2026, with banks permitted to allow existing non-compliant related party exposures to run till maturity without renewal or enhancement. Consequential amendments to Financial Statements Presentation and Disclosure Directions, 2026 have been issued separately.



Vaibhav Chaturvedi
(Chief General Manager)

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