The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Local Area Banks - Concentration Risk Management) Directions, 2025.
The following has been stated: -
•The RBI (Local Area Banks – Concentration Risk Management) Directions, 2025, set prudential exposure limits to single and group borrowers, specific counterparties, sectors, and capital markets to mitigate concentration risk.
•Banks must have Board-approved policies for exposure management, including intra-day and sectoral limits, and adhere to prescribed ceilings for inter-bank liabilities and investments.
•Certain exposures, like those guaranteed by the government, NABARD, or specific All-India Financial Institutions, are exempted.
•These Directions repeal earlier guidelines but coexist with other applicable laws, and RBI clarifications are final.
•These directions shall become effective on November 28, 2025.
[Notification No.: RBI/DOR/2025-26/232 DOR.CRE.REC.151/07-02-003/2025-26]
