The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks- Concentration Risk Management) Directions, 2025.
The following has been stated: -
•The RBI (Regional Rural Banks – Concentration Risk Management) Directions, 2025, aim to limit risks from high exposure to single or group borrowers and ensure diversified lending.
•RRBs must maintain single and group borrower exposure within 15% and 40% of owned funds, respectively, and follow Board-approved lending programs favouring small borrowers.
•Investment ceilings are specified: 10% of owned funds in Tier-II bonds of sponsor banks, and 5% of incremental deposits in corporate shares/debentures, with exemptions for specified institutions.
•Previous concentration risk guidelines for RRBs are repealed, but actions under them remain valid. RBI retains authority to issue clarifications and final interpretations, which are binding.
•These directions shall come into effect from November 28, 2025.
[Notification No.:RBI/DOR/2025-26/257 DOR.CRE.REC.176/07-03-004/2025-26]
