--- title: "Amendment to Commercial Banks – Concentration Risk Management Directions" date: 2026-05-27 author: "King Stubb & Kasiva" url: https://ksandk.com/newsletter/rbi-concentration-risk-management-directions-2026/ --- # Amendment to Commercial Banks – Concentration Risk Management Directions Posted On - 27 May, 2026 • By - King Stubb & Kasiva RBI has issued[[1]](#_ftn1) the **Reserve Bank of India (Commercial Banks – Concentration Risk Management) Second Amendment Directions, 2026** pursuant to the introduction of the RBI (Commercial Banks – Asset Classification, Provisioning and Income Recognition) Directions, 2026, effective April 1, 2027. ## Amendment to Concentration Risk Management Directions The amendment revises the **Explanation to paragraph 131** to clarify that commercial banks must rely upon country risk classifications published by the Export Credit Guarantee Corporation of India Limited (“ECGC”), as amended from time to time, for purposes of country risk assessment. ## Key Change: Country Risk Classification Benchmark Under the revised framework, **ECGC classifications** are formally recognised as the benchmark for country risk evaluation. Commercial banks must refer to these classifications — as amended from time to time — when conducting concentration risk assessments. ## Regulatory Impact The clarification introduces greater regulatory certainty and standardisation in concentration risk assessment methodologies. Specifically, it achieves the following: - Provides **greater regulatory certainty** by designating a single, authoritative source for country risk classifications. - Promotes **standardisation** in concentration risk assessment methodologies across commercial banks. - Formally recognises ECGC classifications as the benchmark for *country risk evaluation*. --- [[1]](#_ftnref1) [https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13380&Mode=0](https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13380&Mode=0) *Last Updated on 27 May, 2026* --- ## Office Locations - [New Delhi](https://ksandk.com/locations/top-corporate-law-firm-in-delhi/) (HQ): +91-11-41318190 | info@ksandk.com - [Mumbai](https://ksandk.com/locations/top-corporate-law-firm-in-mumbai/): 3 offices (Nariman Point, Lower Parel, Andheri) | mumbai@ksandk.com - [Bangalore](https://ksandk.com/locations/top-corporate-law-firm-in-bangalore/): bangalore@ksandk.com - [Chennai](https://ksandk.com/locations/chennai/): chennai@ksandk.com - [Hyderabad](https://ksandk.com/locations/hyderabad/): hyderabad@ksandk.com - [Pune](https://ksandk.com/locations/pune/): pune@ksandk.com - [Kochi](https://ksandk.com/locations/kochi/): kochi@ksandk.com ## Contact - [Contact Page](https://ksandk.com/contact-us/) - General: info@ksandk.com | +91-11-41318190 - WhatsApp: +91-7428567444 - [Privacy Statement](https://ksandk.com/privacy-statement/) - [Terms of Use](https://ksandk.com/terms-of-use/)