The Reserve Bank of India (RBI) on July 31, 2026, issued the Reserve Bank of India (Small Finance Banks – Miscellaneous) Supervisory Directions, 2026.
These Directions shall come into effect on July 31, 2026.
The following has been stated:
• The Directions consolidate various supervisory instructions applicable to Small Finance Banks (SFBs) into a single regulatory framework to strengthen governance, regulatory oversight, and compliance. The Directions apply to all SFBs and prescribe requirements relating to regulatory approvals, governance, reporting, and supervisory interactions with the Reserve Bank of India.
• The Directions provide a framework for obtaining RBI approval for specified corporate actions and organisational changes, including amendments to constitutional documents, changes in management or shareholding where applicable, opening or closing offices in accordance with regulatory requirements, and other matters requiring prior regulatory approval. They also prescribe the manner in which banks are to communicate significant developments and furnish information sought by the RBI.
• The Directions lay down governance-related provisions requiring SFBs to maintain sound internal control systems, effective risk management practices, and proper oversight by the Board of Directors and senior management. They also provide guidance on maintaining records, preserving documents, and facilitating supervisory inspections, audits, and examinations conducted by the RBI.
• Further, the Directions prescribe procedures for furnishing information, responding to supervisory observations, maintaining regulatory records, and ensuring compliance with instructions issued by the RBI from time to time. They also clarify that the RBI may issue additional directions, seek further information, or grant exemptions wherever considered appropriate in the interest of effective banking supervision.
• The Directions repeal the earlier miscellaneous supervisory instructions applicable to Small Finance Banks while preserving actions, approvals, proceedings, and liabilities arising under the previous framework.
[Notification no. – RBI/DoS/2026-27/425 DoS.CO.PPG.19/11.01.005/2026-27]
