RBI Updates Framework for UPI-Linked Credit Facilities by Small Finance Banks

The Reserve Bank of India (RBI) has amended the Small Finance Banks – Credit Facilities Directions, 2025 to clarify the regulatory treatment of credit facilities linked to payment instruments, including pre-sanctioned credit lines through UPI.

The amendment specifies that the prudential treatment of such credit facilities will be based on the nature of the underlying credit facility, irrespective of the payment channel or technology used. Banks must include applicable terms and conditions in their credit policies and ensure compliance with existing regulations.

The amendment is effective immediately.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13527

RBI Clarifies Regulatory Treatment of UPI-Linked Credit Facilities

The Reserve Bank of India (RBI) has amended the Commercial Banks – Credit Facilities Directions, 2025 to establish a regulatory framework for credit facilities linked to specific payment instruments, including pre-sanctioned credit lines through the Unified Payments Interface (UPI).

The amendment clarifies that the prudential treatment of such credit facilities will be determined by the nature of the underlying credit facility, irrespective of the payment channel or technology used. Banks are also required to include the terms and conditions of such facilities in their credit policies and ensure compliance with all applicable regulatory requirements. Only credit facilities permitted under existing regulations may be offered through these arrangements.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13528

RBI Revises Open Position Norms for AD Category-I Banks

The Reserve Bank of India (RBI) has amended the guidelines governing the open positions of Authorised Dealer (AD) Category-I banks in relation to foreign currency exposures.

Under the revised directions, AD Category-I banks are required to exclude positions arising from hedged transactions related to FCNR(B) deposits, External Commercial Borrowings (ECBs), and Overseas Foreign Currency Borrowings (OFCBs) mobilized under the RBI’s swap facility while computing their net overnight open position. The revised treatment is subject to continued compliance with the applicable foreign exchange risk management guidelines.

The amendment has been issued under the provisions of the Foreign Exchange Management Act (FEMA), 1999, and is effective immediately.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13529

RBI Updates Rules for Recovery of Excess Government Pension Payments

The Reserve Bank of India (RBI) has amended the Directions on Disbursement of Government Pension by Agency Banks to strengthen the recovery process for excess or wrongful pension payments.

The revised framework requires banks to notify pensioners before initiating any recovery, obtain consent where applicable, and follow a defined recovery process. Banks must establish a Board-approved recovery policy for errors attributable to the bank and immediately credit excess amounts back to the Government account upon detection.

For recoveries arising from Government-related errors, banks shall act only on Government instructions. Express authorization from the pensioner is required if recovery is made from the account balance instead of the monthly pension.

The amendment is effective from the date of issue.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13530

RBI Revises Capital Requirements for Foreign Exchange Risk

The Reserve Bank of India (RBI) has amended the Prudential Norms on Capital Adequacy Directions, 2025 by updating the framework for calculating capital requirements related to foreign exchange risk. The amendment clarifies the treatment of net open foreign exchange positions, including positions held across foreign branches and subsidiaries, the timing for recognising transactions in position calculations, and the methodology for computing capital requirements. Banks are required to maintain capital equal to 9% of their overall net open foreign exchange position, in addition to capital required for other risks, in line with the revised prudential norms.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13531

RBI Revises Foreign Exchange Risk Calculation Framework for Small Finance Banks

The Reserve Bank of India (RBI) has issued the Seventh Amendment Directions, 2026 to revise the methodology for calculating the Net Open Position (NOP) for Small Finance Banks (SFBs) operating as Authorised Dealer Category-I banks. Effective April 1, 2027, the amendment introduces a standardized framework for measuring foreign exchange and gold exposures in line with international standards. It specifies the scope of positions to be included or excluded, the methodology for calculating currency and gold exposures, and the treatment of derivative transactions. SFBs are required to calculate their Net Open Position at the close of each business day and comply with the applicable reporting and risk management requirements prescribed by the RBI.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13533

RBI Revises Foreign Exchange Risk Capital Framework for Local Area Banks

The Reserve Bank of India (RBI) has issued the Local Area Banks – Prudential Norms on Capital Adequacy Amendment Directions, 2026, introducing a revised framework for measuring foreign exchange risk. Effective April 1, 2027, Local Area Banks (LABs) must calculate their Net Open Position (NOP) in foreign currencies and gold on a daily basis using a standardized methodology aligned with international standards. The amendment also specifies the treatment of eligible and excluded positions, derivative exposures, and gold holdings, while requiring LABs to maintain a capital charge of 9% of their overall Net Open Position, in addition to capital required for other risks. The revised framework replaces the existing foreign exchange risk provisions under the 2025 Directions.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13532

RBI Introduces Standardised Framework for Managing Foreign Exchange and Gold Risk in RRBs

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Regional Rural Banks – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026, effective April 1, 2027. The amendment introduces a uniform methodology for Regional Rural Banks (RRBs) to calculate their Net Open Position (NOP) in foreign exchange and gold for capital adequacy purposes.

Under the revised framework, RRBs must calculate their foreign exchange and gold exposures on a daily basis using a standardised approach that includes on-balance sheet and off-balance sheet positions. Certain items, such as positions deducted from regulatory capital and non-performing foreign currency assets, are excluded from the calculation. The resulting Net Open Position will attract a 100% risk weight for capital adequacy purposes. The amendment also clarifies that only RRBs authorised to undertake foreign exchange business are required to calculate foreign exchange exposures, while other RRBs will consider only their gold positions, where applicable.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13534

RBI Revises Capital Adequacy Framework for Foreign Exchange and Gold Risk in Urban Co-operative Banks

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Urban Co-operative Banks – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026, effective April 1, 2027. The amendment introduces a revised and standardised methodology for Urban Co-operative Banks (UCBs) to calculate their Net Open Position (NOP) in foreign exchange and gold for capital adequacy purposes.

Under the revised framework, UCBs must compute their foreign exchange and gold exposures daily by considering eligible on-balance sheet and off-balance sheet positions, while excluding specified regulatory capital deductions and non-performing foreign currency assets. The amendment requires UCBs to maintain a capital charge equal to 9% of the overall Net Open Position, in addition to capital requirements for other risks. It also clarifies that foreign exchange risk requirements apply only to Authorised Dealer UCBs, while other UCBs are required to consider only their gold positions, where applicable.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13535

RBI Revises Capital Adequacy Framework for Foreign Exchange and Gold Risk in Rural Co-operative Banks

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Rural Co-operative Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2026, effective April 1, 2027. The amendment introduces a standardised methodology for Rural Co-operative Banks (RCBs) to calculate their Net Open Position (NOP) in foreign exchange and gold for capital adequacy purposes.

Under the revised framework, RCBs are required to calculate their foreign exchange and gold exposures daily by considering eligible assets, liabilities, and off-balance sheet positions, while excluding specified regulatory capital deductions and non-performing foreign currency assets. The amendment requires the resulting Net Open Position to be assigned a 100% risk weight for capital adequacy purposes, in addition to capital requirements for other risks. It also clarifies that foreign exchange risk requirements apply only to Authorised Dealer Rural Co-operative Banks, while other RCBs are required to consider only their gold positions, where applicable.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13536

RBI Revises Capital Adequacy Framework for Foreign Exchange and Gold Risk for AIFIs

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Amendment Directions, 2026, effective April 1, 2027. The revised framework aligns the computation of Net Open Position (NOP) and capital requirements for foreign exchange and gold exposures with international standards.

The amendment introduces a standardized methodology for calculating Net Open Position, covering spot and forward positions, derivatives, guarantees, foreign currency options, and gold exposures. It also specifies the treatment of structural foreign currency investments, overseas operations, and eligible exclusions from Net Open Position. AIFIs are required to calculate Net Open Position at the close of each business day, maintain capital equal to 9% of the overall Net Open Position, and comply with reporting and exposure limit requirements under the RBI’s Risk Management and Inter-Bank Dealings framework.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13538

RBI Updates Foreign Exchange Capital Framework for Standalone Primary Dealers

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Standalone Primary Dealers) Second Amendment Directions, 2026, effective April 1, 2027, introducing a revised framework for the computation of Net Open Position (NOP) and capital requirements for foreign exchange risk.

Under the amended framework, Standalone Primary Dealers (SPDs) must calculate their Net Open Position daily by considering foreign currency assets, liabilities, off-balance sheet exposures, derivatives, and other eligible foreign exchange positions. The directions prescribe a standardized methodology for measuring foreign exchange risk and require SPDs to maintain capital equal to 15% of the overall Net Open Position under the standardized approach. The amendment also aligns reporting, exposure limits, and NOP computation with the RBI’s Master Direction on Risk Management and Inter-Bank Dealings, while removing the earlier provisions under paragraph 93.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13537

RBI Revises Criteria for NBFC Upper Layer Classification

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Banking Financial Companies – Registration, Exemptions and Framework for Scale Based Regulation) Second Amendment Directions, 2026, introducing changes to the Scale Based Regulatory (SBR) Framework for NBFCs.

Under the revised framework, NBFCs with an asset size of ₹1,00,000 crore or more, based on the latest audited financial statements, will be classified in the Upper Layer (NBFC-UL). The earlier methodology and related provisions for identifying Upper Layer NBFCs have been removed, and the asset size threshold will be reviewed every three years.

The amendment also introduces guidelines for NBFCs that are group entities of Scheduled Commercial Banks. Such NBFCs must comply with the applicable provisions of the RBI (Commercial Banks – Undertaking of Financial Services) Directions, 2025 for business activities undertaken by both the NBFC and its parent bank, while continuing to retain their classification under the existing Scale Based Regulation framework.

These amendments came into effect from the date of issuance.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13539

RBI Revises Concentration Risk Management Framework for NBFCs

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Banking Financial Companies – Concentration Risk Management) Third Amendment Directions, 2026, revising concentration risk norms under the Scale Based Regulatory (SBR) Framework.

The amendment withdraws concentration norm exemptions for Government-owned NBFCs, requiring them to comply with the exposure limits applicable to their regulatory layer. It also clarifies the treatment of State Government-guaranteed exposures, which will be exempt from prudential exposure limits and assigned a 20% risk weight. Additionally, the permissible exposure limit for Infrastructure Finance Companies (IFCs) in the Upper Layer to a group of connected counterparties has been increased to 45% of Tier 1 capital.

These amendments came into effect from the date of issuance.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13540

RBI Updates Governance Norms for Upper Layer NBFCs

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Banking Financial Companies – Governance) Amendment Directions, 2026, revising governance requirements for NBFCs under the Scale Based Regulatory (SBR) Framework.

The amendment exempts Government-owned NBFCs in the Upper Layer (NBFC-UL) that are fully owned and controlled by the Government from the governance provisions specified under paragraph 43 of the RBI’s Governance Directions.

These amendments came into effect from the date of issuance.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13541

RBI Revises Financial Statement Disclosure Norms for Upper Layer NBFCs

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Non-Banking Financial Companies – Financial Statements: Presentation and Disclosures) Second Amendment Directions, 2026, revising disclosure requirements for NBFCs under the Scale Based Regulatory (SBR) Framework.

The amendment exempts Upper Layer NBFCs (NBFC-UL) that are fully owned and controlled by the Government from the financial statement presentation and disclosure requirements specified under paragraph 23 of the RBI Directions.

These amendments came into effect from the date of issuance.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13542

RBI Strengthens Customer Protection for Electronic Banking Fraud

The Reserve Bank of India (RBI) has introduced enhanced customer protection measures for fraudulent electronic banking transactions (EBTs). Banks must establish transparent policies for fraud reporting, grievance redressal, customer awareness, and liability management, while strengthening fraud detection and prevention systems.

The directions require banks to send transaction alerts, provide 24×7 fraud reporting channels, investigate complaints within prescribed timelines, and offer zero liability to customers in eligible cases. They also introduce a compensation framework for qualifying small-value fraud cases and prohibit banks from charging customers for regulatory SMS alerts.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13543

RBI Strengthens Customer Protection Against Digital Banking Fraud

The Reserve Bank of India has amended the Small Finance Banks – Customer Service Directions, 2025 to strengthen customer protection against fraudulent electronic banking transactions. Effective January 1, 2027, the amendment introduces a comprehensive framework covering customer liability, fraud reporting, complaint resolution, compensation, and bank responsibilities.

The revised directions require Small Finance Banks to establish a transparent customer protection policy, implement robust fraud detection and prevention systems, issue instant transaction alerts, and provide 24×7 channels for reporting fraudulent transactions. Customers are entitled to zero liability in cases involving bank negligence and, under specified conditions, third-party breaches. Banks must resolve complaints within prescribed timelines, provide transaction reversals where applicable, and offer compensation for eligible small-value fraudulent transactions. The amendment also introduces provisions for temporary credit (“shadow reversal”) for fraudulent credit card transactions and strengthens oversight through periodic reporting to the Board.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13544

RBI Enhances Protection Against Fraudulent Digital Banking Transactions

The Reserve Bank of India (RBI) has amended the Payments Banks Directions, 2025 to strengthen customer protection against fraudulent electronic banking transactions. The revised framework requires Payments Banks to implement stronger fraud prevention measures, provide 24×7 fraud reporting channels, and issue timely transaction alerts.

The amendments also define customer liability for unauthorised transactions, introduce a compensation mechanism for eligible small-value fraud cases, prescribe timelines for complaint resolution and transaction reversal, and require board-level oversight of fraud management and customer grievance redressal.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13545

RBI Strengthens Customer Protection Against Fraudulent Electronic Banking Transactions for Local Area Banks

The Reserve Bank of India (RBI) has amended the Local Area Banks (LABs) Directions, 2025 to introduce a comprehensive framework for protecting customers against fraudulent electronic banking transactions (EBTs). Effective January 1, 2027, the amendment requires LABs to strengthen fraud prevention, customer communication, grievance handling, and compensation mechanisms.

The revised framework requires LABs to establish board-approved policies covering customer rights and responsibilities, fraud reporting channels, complaint resolution timelines, and awareness initiatives. Banks must provide instant SMS alerts for electronic transactions above ₹500, email alerts where applicable, and multiple 24×7 channels for customers to report fraudulent transactions.

The amendment also defines customer liability in different fraud scenarios, mandates timely reversal of eligible fraudulent transactions, introduces compensation for certain small-value fraud cases, and requires banks to implement robust monitoring, reporting, and governance mechanisms for electronic banking frauds.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13546

Strengthening Customer Protection Against Digital Banking Fraud

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Regional Rural Banks – Customer Service) Amendment Directions, 2026, introducing a revised framework for protecting customers against fraudulent electronic banking transactions (EBTs). The amendments require Regional Rural Banks (RRBs) to strengthen fraud reporting, customer protection, grievance handling, and compensation mechanisms.

Under the revised framework, RRBs must provide 24×7 channels for customers to report fraudulent transactions, send instant transaction alerts, establish board-approved customer protection policies, and implement robust fraud detection systems. The directions also define customer liability in cases of unauthorised transactions, prescribe timelines for complaint resolution, and require reversal of eligible fraudulent transactions without causing financial loss to customers. Additionally, RBI has introduced a compensation mechanism for eligible victims of small-value digital frauds and strengthened reporting and monitoring requirements for banks. The amended provisions aim to improve customer protection, enhance fraud response, and promote safer digital banking services.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13547

RBI Strengthens Customer Protection Against Fraudulent Digital Banking Transactions for UCBs

The Reserve Bank of India (RBI) has amended the Urban Co-operative Banks (UCBs) Directions, 2025 to strengthen customer protection against fraudulent electronic banking transactions (EBTs). The revised framework requires UCBs to establish comprehensive policies covering customer rights and responsibilities, fraud reporting, grievance redressal, and awareness initiatives.

The Directions mandate UCBs to implement robust fraud detection and prevention systems, provide secure digital banking channels, and send transaction alerts through SMS and email. Customers must be offered multiple 24×7 channels to report fraudulent transactions, with banks required to acknowledge complaints immediately and take prompt action to prevent further unauthorized transactions.
The amendment also defines customer liability for fraudulent transactions, specifies timelines for complaint resolution, and introduces a compensation mechanism for eligible small-value fraud cases. In addition, UCBs must periodically report fraud-related complaints to their Board, maintain transparent grievance redressal processes, and refrain from charging customers for regulatory SMS alerts.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13548

RBI Strengthens Customer Protection Against Fraudulent Digital Banking Transactions for Rural Co-operative Banks

The Reserve Bank of India (RBI) has amended the Rural Co-operative Banks – Customer Service Directions, 2025 to strengthen customer protection against fraudulent electronic banking transactions. Effective from January 1, 2027, the amendment introduces a comprehensive framework covering customer liability, fraud reporting, complaint handling, transaction alerts, and compensation.

The revised directions require Rural Co-operative Banks to establish a board-approved customer protection policy, provide 24×7 channels for reporting fraudulent transactions, send mandatory transaction alerts, and ensure timely resolution of complaints. The framework also defines customer liability in cases involving bank negligence, third-party breaches, or customer negligence, introduces provisions for temporary (shadow) reversal of disputed credit card transactions, and establishes a compensation mechanism for eligible victims of small-value fraudulent electronic banking transactions.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13549

RBI Simplifies FEMA Reporting and Return Filing Requirements

The Reserve Bank of India (RBI) has revised the reporting requirements under the Foreign Exchange Management Act (FEMA), 1999 to simplify regulatory reporting for Authorised Persons. The changes introduce updated reporting formats, streamline return filing, and discontinue certain reporting requirements.

Under the revised framework, the FLM-8 return has been updated to include foreign currency note write-offs, while prior RBI approval for write-offs exceeding USD 2,000 has been removed. Authorised Persons with franchisee arrangements and Indian Agents under the Money Transfer Service Scheme (MTSS) are now required to submit quarterly lists of franchisees and sub-agents, respectively. The RBI has also discontinued several returns, registers, and reporting requirements, while requiring entities to continue maintaining complete transaction records for supervisory and inspection purposes. These changes are effective under the Foreign Exchange Management Act, 1999.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13550

RBI Withdraws Obsolete FEMA Circulars to Streamline Foreign Exchange Regulations

The Reserve Bank of India (RBI) has withdrawn a number of circulars issued under the Foreign Exchange Management Act (FEMA), 1999, following a comprehensive review of foreign exchange regulations. The withdrawn circulars have become inoperative due to subsequent regulatory amendments, overlapping provisions, redundancy, or replacement by newer directions.

This initiative is part of RBI’s ongoing effort to simplify and rationalise the FEMA regulatory framework, ensuring that only current and relevant instructions remain in force. Authorised Persons have been advised to inform their customers and stakeholders about these changes.

The circular has been issued under Sections 10(4) and 11(1) of the Foreign Exchange Management Act, 1999.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13551

RBI Updates KYC Compliance Requirements Following UNSC Sanctions List Amendment

The Reserve Bank of India (RBI) has notified regulated entities about an amendment to the United Nations Security Council (UNSC) 1267/1989 ISIL (Da’esh) & Al-Qaida Sanctions List under the provisions of Section 51A of the Unlawful Activities (Prevention) Act (UAPA), 1967. The update includes revised details for one listed individual.

Regulated entities are required to screen their customers against the updated sanctions list and ensure that no accounts or financial relationships exist with individuals or entities included in the list. Where applicable, entities must take action in accordance with the RBI’s KYC Directions, 2025 and the procedures prescribed under the UAPA Order.

The circular also reiterates the process for handling de-listing requests and directs regulated entities to use the latest sanctions lists published by the United Nations while ensuring ongoing compliance with applicable KYC and anti-terror financing requirements.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13554

RBI Streamlines Board Governance Framework for Commercial Banks

The Reserve Bank of India (RBI) has introduced a revised governance framework for commercial banks, effective October 1, 2026, to streamline Board responsibilities and decision-making. The framework consolidates regulatory requirements and classifies matters requiring Board approval, periodic review, information, or delegation to Board Committees.

The revised framework covers key governance areas such as risk management, capital planning, KYC, operational resilience, outsourcing, cyber security, customer service, fraud risk, compliance, and investment oversight. It also specifies activities that may be delegated to Board Committees while maintaining overall Board accountability.

The revised directions aim to simplify governance requirements, reduce duplication across regulatory instructions, and provide greater clarity on the roles and responsibilities of Boards and their Committees.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13555

RBI Revises Board Governance Framework for Small Finance Banks

The Reserve Bank of India (RBI) has issued a revised governance framework for Small Finance Banks (SFBs), consolidating Board-related regulatory requirements into a single structure. The framework clearly identifies the policies and matters that require Board approval, review, or reporting, while specifying those that may be delegated to Board Committees. It covers key areas including governance, risk management, compliance, IT, customer service, KYC, outsourcing, branch expansion, operational resilience, and capital planning. The revised framework will take effect from October 1, 2026, for the specified directions.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13556

RBI Simplifies Board Governance Framework for Payments Banks

The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Payments Banks) Amendment Directions, 2026, effective October 1, 2026, to streamline Board governance requirements for Payments Banks.

The revised framework clearly defines policies requiring Board approval, identifies matters that may be delegated to Board Committees, and consolidates Board oversight requirements across governance, risk management, compliance, cybersecurity, operational resilience, internal audit, customer service, KYC, outsourcing, and IT governance. The amendments aim to standardise governance practices and simplify Board decision-making.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13558

RBI Simplifies Board Governance Framework for Local Area Banks

The Reserve Bank of India (RBI) has introduced a consolidated governance framework for Local Area Banks (LABs), effective October 1, 2026. The directions bring together Board-related approval, review, and reporting requirements into a single framework, replacing multiple references across existing regulations.

The framework defines matters requiring Board approval, Board review, and Board reporting, while permitting delegation of specified responsibilities to Board committees such as the Audit Committee, Risk Management Committee, and other authorized committees. It covers governance, risk management, internal audit, compliance, cybersecurity, outsourcing, lending, investments, operational resilience, fraud risk management, and customer service.

https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13557