The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Credit Risk Management) Directions, 2025.
The following has been stated namely: -
• The directions apply to all-India financial institutions (AIFIs) such as EXIM Bank, NABARD, SIDBI, NH Bank, and NaBFID and aim to strengthen their credit risk frameworks.
• The directive mandates that each institution adopt a comprehensive board-approved credit risk policy, covering connected lending, use of Legal Entity Identifiers (LEIs) for large non-individual borrowers, filing of security interests with the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI), and imposes strict limits and procedures for working-capital and revolving funding for AIFIs.
• Regarding connected exposures, the document prohibits AIFIs from granting loans or non-funded facilities to their directors, firms in which directors have interests, or relatives of directors beyond specified thresholds, and prescribes board oversight of every such case to prevent conflicts of interest.
• Specifically, it requires non-individual borrowers with exposures of ₹5 crore and above to obtain an LEI code before new or renewed exposures and mandates that AIFIs ensure registration of security interests created, modified or satisfied, in CERSAI for immovable, movable and intangible assets to improve transparency and mitigate fraud/over-lending.
• The Directions come into immediate effect, repeal prior guidelines on credit risk for AIFIs, and emphasise that they operate in addition to (and not in derogation of) any other applicable law, regulation or direction.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR/ 2025-26/325 DOR.CRE.REC.244/07-02-007/2025-26]
