The Reserve Bank of India issued the “Regional Rural Banks – Credit Risk Management (Second Amendment) Directions, 2026” on April 29, 2026, under Sections 21 and 35A of the Banking Regulation Act, 1949. This amendment follows changes to the stressed assets resolution framework and introduces a new Chapter IIA titled “Credit Risk Evaluation.” The key provision mandates that Regional Rural Banks (RRBs) incorporate the potential impact of calamities on borrowers while conducting credit assessments. This ensures that lending decisions account for risks arising from natural disasters or unforeseen disruptive events that may affect borrowers’ repayment capacity, particularly in rural and vulnerable regions. The amendment strengthens the resilience and prudence of credit appraisal systems in RRBs by aligning them with real-world contingencies. These directions aim to enhance risk-sensitive lending practices and will come into force from July 1, 2026, in the public interest.
Reserve Bank of India
RBI/2026-27/63
DOR.STR.REC.52/21-04-048/2026-27| Dated: April 29, 2026
Reserve Bank of India (Regional Rural Banks – Credit Risk Management) Second Amendment Directions, 2026
Please refer to Reserve Bank of India (Regional Rural Banks – Resolution of Stressed Assets) Amendment Directions, 2026 dated April 29, 2026.
2. Consequent to the aforesaid Amendment Directions, in exercise of the powers conferred by the sections 21 and 35A of the Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank of India (hereinafter called the Reserve Bank) in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
3. These Amendment Directions modify the Directions as under:
I. Chapter IIA shall be inserted as under:
Chapter IIA: Credit Risk Evaluation
5A. Credit assessments carried out by a bank shall suitably factor in the possible impact of calamities on borrowers who may be impacted by such events.
4. The above amendment shall come into force with effect from July 1, 2026.
(Vaibhav Chaturvedi)
Chief General Manager
