The Reserve Bank of India (RBI) on November 28, 2025, issued the Reserve Bank of India (Regional Rural Banks – Resolution of Stressed Assets) Directions, 2025.
The following has been stated: -
•The Directions provide a framework for early identification, reporting, and time-bound resolution of stressed assets in Regional Rural Banks (RRBs), including guidelines on compromise settlements and technical write-offs.
•RRBs must have Board-approved policies detailing processes, staff accountability, permissible sacrifices, and delegation of powers for settlements and write-offs.
•Borrower accounts must be classified early into Special Mention Accounts (SMA) on default, and restructuring is allowed only under specified conditions, excluding wilful defaulters and frauds.
•Compromise settlements and technical write-offs aim to maximize recovery without waiving legal claims, with defined cooling periods before fresh credit, even for accounts of wilful defaulters or frauds.
•Participation in Government Debt Relief Schemes (DRS) requires prudential assessment, pre-funding by the Government, targeted relief, and compliance with RBI prudential norms, with model procedures shared for consultation.
•These directions shall come into effect from November 28, 2025.
[Notification No.:RBI/DOR/2025-26/263 DOR.STR.REC.182/21.04.048/2025-26]
