RBI issues Amendment Directions for Repeal of Market Mechanism Framework

**Executive Summary** This document is a press release from the Reserve Bank of India (RBI) announcing the issuance of amendment directions to repeal the "Guidelines on Enhancing Credit Supply for Large Borrowers through Market Mechanism," as consolidated in various directions. These amendment directions are intended to recalibrate prudential requirements. The release is dated December 04, 2025. **Key Points / Main Content** * **Background:** * On October 1, 2025, the RBI issued a draft repeal circular seeking stakeholder feedback on a proposal to repeal extant instructions issued in 2016. * Feedback received was examined, leading to the decision to repeal the instructions. * **Repealed Instructions:** * The extant instructions repealed were consolidated in: * Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025. * Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Directions, 2025. * A statement on the feedback received is provided in the Annex. * **Amendment Directions Issued:** * RBI has issued the following Amendment Directions to repeal the Guidelines: 1. Reserve Bank of India (Commercial Banks – Concentration Risk Management) Amendment Directions, 2025 2. Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Amendment Directions, 2025 3. Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025 4. Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025 5. Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025 6. Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025 * **Objective:** * The objective of the amendment directions is to recalibrate prudential requirements, strengthen the regulatory framework, enhance supervisory oversight, and improve bank balance sheets. **Impact Analysis** **Stakeholder:** Commercial Banks and Small Finance Banks **Impact:** Subject to the revised directions concerning concentration risk management, income recognition, asset classification and provisioning, and prudential norms on capital adequacy. **Action Required:** Review and implement changes as specified in the Amendment Directions.

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