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

Under this notification, the Reserve Bank of India has amended the 2025 Directions by introducing extensive definitional, structural and substantive changes across multiple chapters of the framework.

In ‘Chapter I – Preliminary’, Paragraph 4(1) has been expanded to include several new definitions. These include definitions for “Committee on lending to related parties”, “Contract or arrangement”, “Control”, “Director of a bank”, “Entity”, “Key Managerial Personnel (KMP)”, “Lending”, “Person”, “Promoter”, “Reciprocally Related Person”, “Related Party”, “Related Person”, and “Specified employees”. The insertion of these definitions lays the foundation for a more structured and comprehensive related-party lending framework.

Further, certain existing definitions have been substituted. The definition of “Personal Loan” under sub-paragraph 4(1)(xiv) has been replaced to align with the meaning assigned under the Banking Statistics (Harmonised Definitions). Similarly, the definition of “Relative” under sub-paragraph 4(1)(xv) has been replaced and now adopts the meaning provided under Section 2(77) of the Companies Act, 2013 and the rules framed thereunder.

In Chapter II, Paragraph 5 relating to Board-approved policies has been amended, indicating changes to governance and policy oversight requirements.

In ‘Chapter IV – Statutory Restrictions’, Paragraph 15 has been deleted and a new Paragraph 15A has been inserted in its place. Additionally, Section B.2 and paragraphs 16 to 19 have been deleted, signalling a restructuring of the statutory restriction framework.

In Chapter V – Regulatory Restrictions, significant structural changes have been made. Sections A, A.1 and B, along with paragraphs 24 to 42, have been deleted. In their place, a new Section B.1, along with its sub-sections and newly inserted paragraphs 42A to 42T, has been introduced.

Overall, the amendments substantially reorganise the regulatory architecture, particularly in relation to related-party definitions, governance oversight and lending restrictions, replacing earlier provisions with a more detailed and structured regime.