The Reserve Bank of India (RBI) has issued the Small Finance Banks – Asset Liability Management (ALM) Directions, 2025, under Section 35A of the Banking Regulation Act, 1949, to provide a regulatory framework for managing liquidity, funding, and interest rate risks in small finance banks. Effective immediately from the date of issuance, these directions are applicable to all small finance banks operating in India. While the directions outline principles, methodologies, and reporting requirements for asset-liability management, they do not automatically authorize any specific activity, transaction, or financial instrument; banks must continue to comply with existing statutory and regulatory requirements. By establishing structured ALM practices, RBI aims to strengthen financial stability, improve risk management, and ensure prudent liquidity and interest rate management within small finance banks. These measures are intended to safeguard depositor interests, enhance transparency, and support sustainable growth while mitigating potential financial risks in the banking sector.
RESERVE BANK OF INDIA
RBI/DOR/2025-26/194
DOR.LRG.No.113/13-10-002/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Small Finance Banks – Asset Liability Management) Directions, 2025
In exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949, and all other provisions / laws enabling the Reserve Bank of India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in the public interest so to do, hereby, issues the Directions hereinafter specified.
Chapter I – Preliminary
A. Short Title and Commencement
1. These Directions shall be called the Reserve Bank of India (Small Finance Banks – Asset Liability Management) Directions, 2025.
2. These Directions shall come into effect from the date of issue.
B. Applicability
3. These Directions shall be applicable to Small Finance Banks (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’).
Note: Mere mention of an activity, transaction or item in these Directions does not imply that it is permitted, and the bank shall refer to the extant statutory and regulatory requirements while determining the permissibility or otherwise of an activity, transaction, or item.
Read Full text of the Notification: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/194MD.pdf
