We at Finakon track the regulatory changes. We also use AI to create a summary. We are providing a quick overview of the RBI circulars on a weekly basis on our website. The summary is neither exhaustive nor comprehensive. For accurate information, users shall refer to the original circular of the regulator. Finakon shall not be responsible for inferences drawn based on the summary provided.
Agency Bank Branches to Remain Open on March 31, 2026 for Government Transactions
As per the request of the Government of India, all Agency Banks handling Government receipts and payments will keep their branches operational for public transactions on March 31, 2026 (Tuesday), notwithstanding it being a public holiday.
This arrangement is intended to facilitate the accounting of all Government receipt and payment transactions within the Financial Year 2025–26.
Accordingly, all branches managing Government business will remain open to provide the necessary banking services on the specified date. Banks are also required to ensure adequate public communication regarding the availability of these services.
RBI Revises Voluntary Retention Route (VRR) Framework for FPI Debt Investments
The Reserve Bank of India has introduced changes to the Voluntary Retention Route (VRR) framework for Foreign Portfolio Investors (FPIs) investing in debt instruments.
Key updates include:
- VRR investment limits will be merged with the General Route limits for FPI debt investments.
- Investments in Central Government securities, State Government securities, and corporate debt securities under VRR will be counted within the respective General Route limits.
- FPIs with retention periods longer than the minimum requirement may partially or fully liquidate their portfolio and exit VRR after completing the minimum retention period.
These changes will be effective April 01, 2026, and all existing VRR investments will be transitioned to the General Route limits. AD Category-I banks are required to inform their customers accordingly. The directions are issued under the Foreign Exchange Management Act, 1999.
RBI Amends MSME Lending Norms: Enhanced Collateral-Free Loan Limits Effective April 2026
The Reserve Bank of India has issued the Lending to Micro, Small & Medium Enterprises (MSME) Sector (Amendment) Directions, 2026, introducing revisions to collateral requirements for loans extended to Micro and Small Enterprises (MSEs).
Key changes include:
- Banks shall not accept collateral security for loans up to ₹20 lakh extended to MSE units.
- Collateral-free loans up to ₹20 lakh shall also be provided to units financed under the Prime Minister Employment Generation Programme (PMEGP).
- Based on the borrower’s track record and financial position, banks may extend collateral-free lending up to ₹25 lakh in accordance with their internal policies.
- Banks may avail coverage under the Credit Guarantee Scheme, where applicable.
- Voluntary pledging of gold or silver as collateral for loans within the collateral-free limit will not be treated as a violation of the guidelines.
- Paragraph 6.5 of the existing Directions has been deleted.
These amendments will apply to all eligible loans sanctioned or renewed on or after April 01, 2026. The Directions are issued under the Banking Regulation Act, 1949.
