The Directions stipulate that all loans must be disbursed and repaid directly through borrower accounts, prohibiting third-party control, including LSPs, to safeguard borrower interests.
The new Directions prescribe strict limits on single and group borrower exposures and require Board-approved lending policies. The key takeaway is tighter governance to prevent excessive risk build-up in RRB balance sheets and promote diversification.
The 2025 Directions standardise overdue, SMA and NPA classification through day-end processes, borrower-wise tagging and stricter recovery-based tests, reducing scope for delayed recognition.
RBI has notified binding Directions prescribing prudential capital adequacy norms for UCBs. The key takeaway is mandatory compliance to strengthen financial stability and depositor protection.
The Directions impose clear caps on single and group exposures, mandate Board oversight, and require immediate rectification of breaches. The key takeaway is tighter concentration risk controls with defined exceptions and enhanced reporting.
The RBI mandates small finance banks to promptly identify and report stressed assets. Time-bound resolution plans and compromise settlements ensure financial stability and credit discipline.
Transportation and sub-contract expenses were disallowed as the supporting MOU predated the JV formation. The court upheld the Assessing Officer’s disallowance, noting no contractual or statutory basis for the claim. This highlights the importance of valid agreements for claiming business deductions.
RBI introduces a comprehensive framework standardising interest rates, premature withdrawal norms, and deposit policies for all Local Area Banks. The Directions ensure uniformity, transparency, and customer protection across deposit categories.
The regulator tightened norms on lending to directors, relatives, and connected entities. The framework aims to eliminate conflicts of interest and strengthen governance in institutional lending.
The 2025 directions overhaul credit risk governance, imposing stricter policies, exposure-based account rules, and enhanced monitoring to strengthen stability in rural banking.
