The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Directions, 2025.
The following has been stated namely: -
• It states that RBI has mandated early identification and classification of stressed assets, requiring lenders to report significant exposures promptly and adopt board-approved resolution policies.
• The guidelines stipulate that when a borrower defaults, the lending institutions shall convene within a defined period to formulate a resolution plan, and all lenders shall execute an inter-creditor agreement (ICA) binding them to the agreed strategy.
• Implementation of the resolution plan shall occur within the prescribed timeline, failing which the stressed account is to be referred under the Insolvency and Bankruptcy Code, 2016, for insolvency proceedings.
• The framework emphasizes that any additional financing granted during resolution shall be accompanied by appropriate asset classification and provisioning norms, and the borrowing entity shall repay dissenting lenders at least the liquidation value.
• Finally, the RBI’s directions withdraw preceding frameworks for stressed-asset resolutions, consolidating them under this unified prudential regime.
• This shall come into force from November 28, 2025.
[Notification no. - RBI/DOR /2025-26/332 DOR.STR.REC.251/21.04.048/2025-26]
