The Reserve Bank of India (RBI), on July 31, 2026, issued the Reserve Bank of India (All India Financial Institutions – Fraud Risk Management) Directions, 2026, prescribing a comprehensive framework for the prevention, early detection, investigation, reporting, and monitoring of frauds by All India Financial Institutions (AIFIs), namely EXIM Bank, NABARD, NHB, SIDBI, and NaBFID. The Directions came into force with immediate effect and establish uniform requirements for fraud risk governance, reporting to the Reserve Bank of India (RBI) and Law Enforcement Agencies (LEAs), and dissemination of fraud-related information.
The Directions require AIFIs to adopt a Board-approved Fraud Risk Management Policy covering fraud prevention, early detection, investigation, staff accountability, recovery, reporting, and frameworks for Early Warning Signals (EWS) and Red Flagged Accounts (RFA). They also prescribe governance standards for fraud risk management, independent confirmation from third-party service providers, legal audits of title documents for large-value loan accounts, treatment of fraud accounts under resolution, and compliance with principles of natural justice before classifying and reporting frauds.
Further, the Directions prescribe detailed procedures for reporting frauds to RBI through Fraud Monitoring Returns (FMRs) and the Central Fraud Registry (CFR), reporting frauds to Law Enforcement Agencies, monitoring fraud cases until closure, and reporting incidents of theft, burglary, dacoity, and robbery. The framework aims to strengthen fraud prevention, timely detection, investigation, regulatory reporting, and overall fraud risk management across AIFIs.
[Notification No. RBI/DoS/2026-27/457]
