The Reserve Bank of India (RBI) has issued Draft Second Amendment Directions, 2026 to modify the Commercial Banks – Concentration Risk Management framework, aligning it with proposed changes under the Credit Facilities Directions. Exercising powers under Sections 21 and 35A of the Banking Regulation Act, 1949, the RBI proposes enhanced safeguards for real estate exposures. The amendment deletes paragraph 94 and introduces new provisions requiring banks to set internal limits for aggregate exposure to the real estate sector, including specific sub-categories. Importantly, within the existing prudential ceiling for Commercial Real Estate (CRE) exposures, aggregate bank exposure to Real Estate Investment Trusts (REITs) is capped at 10% of the bank’s eligible capital base. The Directions will take effect from July 1, 2026, or earlier if adopted alongside the Credit Facilities amendments. The move aims to strengthen concentration risk oversight and ensure calibrated exposure to REIT-linked real estate financing.
Reserve Bank of India
RBI/2025-26/<>
DOR.CRE.REC. /07-03-001/2025-26
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Reserve Bank of India (Commercial Banks – Concentration Risk Management) Second Amendment Directions, 2026 – Draft for Comments
Please refer to the Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025 (hereinafter referred to as ‘Directions’).
2. Consequent to the amendments proposed in the draft Reserve Bank of India (Commercial Banks – Credit Facilities) Second Amendment Directions, 2026, in exercise of the powers conferred by Sections 21 and 35A of the Banking Regulation Act, 1949 and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank of India, being satisfied that it is necessary and expedient in public interest so to do, hereby, issues the Directions hereinafter specified.
3. These Amendment Directions shall modify the Directions as under:
3(1) In ‘Chapter V – Exposure Norms’ of the Directions, paragraph 94 shall be deleted.
3(2) The following new paragraphs shall be inserted, namely:
“94A. A bank shall fix internal limits for its aggregate exposure to real estate sector, including the sub-categories of real estate exposures.
94B. Within the prudential ceiling for CRE exposures, aggregate exposure of a bank towards real estate investment trusts (REITs) shall not exceed 10 per cent of a lending bank’s eligible capital base.”
4. These Directions shall come into force from July 1, 2026, or an earlier date if the directions contained in the Reserve Bank of India (Commercial Banks – Credit Facilities) Second Amendment Directions, 2026 are adopted by a bank in entirety.
(Vaibhav Chaturvedi)
Chief General Manager
