The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks- Transfer and Distribution of Credit Risk) Directions, 2025.
The following has been stated: -
•RBI issues a comprehensive framework for Regional Rural Banks (RRBs) on credit risk transfer and distribution to promote loan market development and risk diversification.
•Directions cover transfer of loans, stressed loans, inter-bank participations, borrower account transfers, and take-out financing with clear definitions, procedures, and Board-approved policies.
•Stressed loans can be transferred to permitted banks or ARCs, with valuation, reporting, and Swiss Challenge-based price discovery requirements.
•Transferors retain no obligation post-transfer except as specified; servicing facilities and cash-flow management must follow arm’s length principles.
•Repeals prior guidelines, ensures compliance with existing laws, and mandates disclosure, reporting, and maintenance of records for all loan transfers.
•These directions shall come into effect from November 28, 2025.
[Notification No.:RBI/DOR/2025-26/258 DOR.STR.REC.177/21.04.048 /2025-26]
