The Reserve Bank of India (RBI) issued the Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025 through circular RBI/DOR/2025-26/185 dated November 28, 2025. The RBI stated that it is statutorily mandated to operate the country’s credit system to its advantage. In line with this mandate, the RBI promotes innovation in financial systems, credit products, and delivery mechanisms while ensuring orderly financial sector growth, financial stability, and protection of the interests of depositors and borrowers. The RBI noted that with the progressive deregulation of bank credit, prudential norms serve as regulatory safeguards and are issued periodically to guide regulated entities on the design and delivery of credit-related products and services. The Directions consolidate existing instructions issued to commercial banks relating to credit facilities.
The Directions are issued under the powers granted to the RBI under Sections 21 and 35A of the Banking Regulation Act, 1949. The RBI recorded its satisfaction that issuing these Directions is necessary and expedient in the public interest. Chapter I of the Directions, titled “Preliminary,” sets out the introductory provisions. Under the short title and commencement clause, the Directions are named the Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025. They come into effect immediately upon issuance unless otherwise specified. Under the applicability clause, the Directions apply to all Small Finance Banks, collectively referred to as “banks” and individually as a “bank.”
RESERVE BANK OF INDIA
RBI/DOR/2025-26/185
DOR.CRE.REC.104/07-01-002/2025-26 | Dated: November 28, 2025
Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025
Reserve Bank of India (Reserve Bank) is statutorily mandated to operate the credit system of the country to its advantage. In pursuit of this mandate, the Reserve Bank encourages innovation in the financial systems, credit products and delivery mechanisms while ensuring orderly growth, financial stability and the protection of depositors’ and borrowers’ interest. With the progressive deregulation of bank credit, prudential norms primarily serve as regulatory safeguards. These norms, issued from time to time, provide guidance to regulated entities (REs) on the design and delivery of credit-related products and services. These Directions consolidate the instructions issued to commercial banks on credit facilities.
Accordingly, in exercise of powers conferred by Sections 21, and 35A of the Banking Regulation Act, 1949, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues these 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 – Credit Facilities) Directions, 2025.
2. These Directions shall come into effect immediately upon its issuance, unless indicated otherwise.
B. Applicability
3. These Directions shall be applicable to Small Finance Banks (hereinafter collectively referred to as ‘banks’ and individually as a ‘bank’).
Read Full text of the Notification: https://rbidocs.rbi.org.in/rdocs/notification/PDFs/185MD.pdf
