**Executive Summary**
The Reserve Bank of India (RBI) has issued amendment directions on lending to related parties by regulated entities. These directions are based on the draft directions issued on October 03, 2025, after incorporating feedback from stakeholders. The amendment directions include updates related to Credit Risk Management and Financial Statements for various types of banks and financial institutions, and are effective as of January 05, 2026.
**Key Points / Main Content**
* **Background:**
* On October 03, 2025, RBI issued eight draft directions on lending to related parties.
* The draft directions aimed to provide a harmonized, principle-based framework for Regulated Entities (REs) when lending to related parties.
* **Amendment Directions:**
* Following revisions based on stakeholder feedback, the RBI issued the following Amendment Directions:
* RBI (Commercial Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Small Finance Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Local Area Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Regional Rural Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Urban Co-operative Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Rural Co-operative Banks - Credit Risk Management) Amendment Directions, 2026.
* RBI (Non-Banking Financial Companies- Credit Risk Management) Amendment Directions, 2026.
* RBI (All India Financial Institutions- Credit Risk Management) Amendment Directions, 2026.
* RBI issued Financial Statements Amendment Directions related to presentation and disclosure standards 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) / Banks / Financial Institutions:**
**Impact:** REs need to adopt the updated amendment directions when lending to related parties, ensuring compliance with the harmonized framework for Credit Risk Management and Financial Statements.
**Action Required:** Review and implement the updated amendment directions to align with the new framework, with updates as and when they become effective.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the primary regulator in the context of this document.
Amendment Directions on Lending to Related Parties: A set of regulatory instructions issued by the Reserve Bank of India concerning lending practices related to related parties for various regulated entities.
Commercial Banks: A type of regulated entity governed by the Directions. Multiple documents are applicable to these banks
Small Finance Banks: A type of regulated entity governed by the Directions. Multiple documents are applicable to these banks
Non-Banking Financial Companies: A type of regulated entity governed by the Directions. Multiple documents are applicable to these entities
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भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
वेबसाइट
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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