The Reserve Bank of India issued the Commercial Banks – Credit Risk Management (Third Amendment) Directions, 2026, to strengthen risk assessment frameworks by incorporating the potential impact of natural calamities on borrowers. Exercising powers under the Banking Regulation Act, 1949, the RBI introduced a new provision requiring banks to factor in disaster-related risks while conducting credit evaluations. This amendment aligns credit risk practices with broader regulatory reforms on resolution of stressed assets, ensuring that banks proactively assess vulnerabilities arising from unforeseen calamities such as floods, earthquakes, or other disruptive events. By mandating forward-looking risk assessment, the directions aim to improve resilience in lending decisions, enhance prudential discipline, and reduce the likelihood of future stress in loan portfolios. Effective from July 1, 2026, the amendment reinforces a preventive approach to credit risk management, ensuring that banks integrate environmental and situational risks into their lending frameworks.
Reserve Bank of India
RBI/2026-27/47
DOR.STR.REC.36/21-04-048/2026-27 | Dated: April 29, 2026
Reserve Bank of India (Commercial Banks – Credit Risk Management) Third Amendment Directions, 2026
Please refer to Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Second 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. Paragraph 12A shall be inserted as under:
12A. 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
