**Executive Summary**
This document is a press release from the Reserve Bank of India (RBI), dated January 05, 2026, regarding the issuance of amendment directions on lending to related parties by regulated entities (REs). These amendments are based on feedback received on draft directions issued on October 03, 2025, and aim to provide a harmonized, principle-based framework. The amendment directions are effective as of January 05, 2026.
**Key Points / Main Content**
* **Background:**
* On October 03, 2025, the RBI issued eight draft directions on Lending to Related Parties for various types of Regulated Entities.
* These draft directions sought feedback from stakeholders to provide a harmonised framework for lending to related parties.
* **Amendments:**
* Feedback received on the drafts has been examined and suitably incorporated in the final directions.
* The RBI has issued amendment directions on January 05, 2026, with updates that are effective immediately.
* **Amendment Directions Issued:** The press release notes the issuance of amendment directions pertaining to:
* Credit Risk Management for:
* Commercial Banks
* Small Finance Banks
* Local Area Banks
* Regional Rural Banks
* Urban Co-operative Banks
* Rural Co-operative Banks
* Non-Banking Financial Companies
* All India Financial Institutions
* Financial Statements: Presentation and Disclosures for:
* Commercial Banks
* Small Finance Banks
* Local Area Banks
* Regional Rural Banks
* Urban Co-operative Banks
* Rural Co-operative Banks
* Non-Banking Financial Companies
* All India Financial Institutions
**Impact Analysis**
**Regulated Entities (REs)**
* **Impact:** REs are subject to the updated directions concerning lending to related parties.
* **Action Required:** REs need to adopt the amended framework, rationalising existing provisions. The amendment directions are effective immediately.
Key Entities Referenced
Reserve Bank of India: The primary regulator issuing amendment directions on lending to related parties by regulated entities.
Amendment Directions, 2026: Series of amendments to existing directions pertaining to lending to related parties and financial statements, categorized by type of financial institution.
Lending to Related Parties: The core subject matter of the directions, aimed at harmonizing and rationalizing the framework for lending to related parties by regulated entities (REs).
प्रेस प्रकाशनी PRESS RELEASE
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
:
www.rbi.org.in/hindi
संचार वर्भाग, केंद्रीय कायाालय, शहीद भगत ससिंह मागा, फोटा, म िंबई - 400 001
Website : www.rbi.org.in Department of Communication, Central Office, Shahid Bhagat Singh Marg, Fort,
ई-मेल/email : helpdoc@rbi.org.in Mumbai - 400 001 फोन/Phone: 022 - 2266 0502
January 05, 2026
RBI issues Amendment Directions on Lending to Related Parties
by Regulated Entities
The Reserve Bank of India had, on October 03, 2025, issued eight draft
Directions on Lending to Related Parties, viz.,: (i) Reserve Bank of India (Commercial
Banks – Lending to Related Parties) Directions, 2025 (ii) Reserve Bank of India
(Small Finance Banks – Lending to Related Parties) Directions, 2025 (iii) Reserve
Bank of India (Regional Rural Banks – Lending to Related Parties) Directions, 2025
(iv) Reserve Bank of India (Local Area Banks – Lending to Related Parties)
Directions, 2025 (v) Reserve Bank of India (Urban Co-operative Banks – Lending to
Related Parties) Directions, 2025 (vi) Reserve Bank of India (Rural Co-operative
Banks – Lending to Related Parties) Directions, 2025 (vii) Reserve Bank of India
(Non-Banking Financial Companies – Lending to Related Parties) Directions, 2025
and (viii) Reserve Bank of India (All India Financial Institutions – Lending to Related
Parties) Directions, 2025 seeking feedback from stakeholders. The draft directions
were aimed primarily at providing a harmonised, principle-based framework to be
adopted by REs while lending to related parties, suitably rationalising the existing
provisions.
2. Feedback received on the drafts has been examined and the consequent
modifications, as decided by the Reserve Bank, have been suitably incorporated in
the final directions. A statement on the feedback received on the drafts is provided in
the Annex.
3. Accordingly, the Reserve Bank has today issued the following Amendment
Directions, with updates as and when they become effective.
(i) Reserve Bank of India (Commercial Banks - Credit Risk Management)
Amendment Directions, 2026;
(ii) Reserve Bank of India (Small Finance Banks - Credit Risk Management)
Amendment Directions, 2026;
(iii) Reserve Bank of India (Local Area Banks - Credit Risk Management)
Amendment Directions, 2026;
(iv) Reserve Bank of India (Regional Rural Banks - Credit Risk Management)
Amendment Directions, 2026;
(v) Reserve Bank of India (Urban Co-operative Banks - Credit Risk Management)
Amendment Directions, 2026;
(vi) Reserve Bank of India (Rural Co-operative Banks - Credit Risk Management)
Amendment Directions, 2026.
(vii) Reserve Bank of India (Non-Banking Financial Companies- Credit Risk
Management) Amendment Directions, 2026.2
(viii) Reserve Bank of India (All India Financial Institutions- Credit Risk
Management) Amendment Directions, 2026.
(ix) Reserve Bank of India (Commercial Banks – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(x) Reserve Bank of India (Small Finance Banks – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(xi) Reserve Bank of India (Local Area Banks – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(xii) Reserve Bank of India (Regional Rural Banks – Financial Statements:
Presentation and Disclosures – Amendment Directions, 2026
(xiii) Reserve Bank of India (Urban Co-operative Banks – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(xiv) Reserve Bank of India (Rural Co-operative Banks – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(xv) Reserve Bank of India (Non- Banking Financial Companies – Financial
Statements: Presentation and Disclosures) – Amendment Directions, 2026
(xvi) Reserve Bank of India (All India Financial Institutions – Financial Statements:
Presentation and Disclosures) – Amendment Directions, 2026
(Brij Raj)
Press Release: 2025-2026/1856 Chief General Manager