The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks – Credit Risk Management) Directions, 2025.
The following has been stated: -
•The Directions aim to strengthen credit risk management in Regional Rural Banks (RRBs), covering credit exposures, prudential tools, statutory restrictions, and regulatory compliance.
•Banks must have Board-approved policies on credit risk, including valuation of properties, empanelment of valuers, and monitoring of CC/OD/current accounts.
•Strict prohibitions apply on loans to directors, advances against the bank’s own shares, and loans for buy-back of securities, with specific exemptions for CEO/Whole-time Directors.
•Guidelines cover proper opening and monitoring of current, collection, and CC/OD accounts based on borrowers’ aggregate exposure, including escrow arrangements for large exposures.
•Provisions include filing security interests with CERSAI, delivery of bank credit, restrictions on lending to NBFCs, and repeal of previous credit risk guidelines, with RBI retaining final interpretative authority.
•These directions shall come into effect from November 28, 2025.
[Notification No.: RBI/DOR/2025-26/256 DOR.CRE.REC.175/07-02-004/2025-26]
