The Reserve Bank of India, through its 2026 Second Amendment Directions on Urban Cooperative Banks’ Credit Risk Management, has introduced a focused regulatory change to strengthen risk assessment practices in light of calamities. A new Chapter IIA on “Credit Risk Evaluation” mandates that banks incorporate the potential impact of natural or other calamities on borrowers while conducting credit assessments. This ensures that lending decisions and risk profiling are more realistic, forward-looking, and sensitive to external disruptions affecting repayment capacity. The amendment aligns with the broader stressed asset resolution framework notified on the same date, reinforcing a proactive approach to credit risk management. By requiring banks to explicitly consider calamity-related vulnerabilities, the RBI aims to improve resilience in the urban cooperative banking sector while promoting prudent lending practices. These directions will come into effect from July 1, 2026.
Reserve Bank of India
RBI/2026-27/59
DOR.STR.REC.48/21-04-048/2026-27| April 29, 2026
Reserve Bank of India (Urban Cooperative Banks – Credit Risk Management) Second Amendment Directions, 2026
Please refer to Reserve Bank of India (Urban Cooperative 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 20, 21 and 35A read with the section 56 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
6A. 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
