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.
RBI Streamlines Branch Authorisation for UCBs
The Reserve Bank of India (RBI) has repealed the Urban Co-operative Banks – Branch Authorisation Directions, 2025 issued on November 28, 2025, and replaced them with revised Directions issued on December 04, 2025.
Actions, approvals, and obligations under the repealed Directions remain valid and continue to be governed by their provisions. The repeal does not affect any rights, liabilities, penalties, or ongoing investigations under the previous Directions.
This update ensures clarity and continuity in regulatory compliance for Urban Co-operative Banks.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13192
Rural Co-operative Banks: RBI Updates Regulatory Directions, 2025
The Reserve Bank of India (RBI) has repealed the Rural Co-operative Banks– Branch Authorisation Directions, 2025 issued on November 28, 2025, and replaced them with revised Directions issued on December 04, 2025.
Actions, approvals, and obligations under the repealed Directions remain valid and continue to be governed by their provisions. The repeal does not affect any rights, liabilities, penalties, or ongoing investigations under the previous Directions.
This update ensures clarity and continuity in regulatory compliance for Rural Co-operative Banks.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13193
RBI Updates Miscellaneous Directions for Rural Co-operative Banks, 2025
The Reserve Bank of India (RBI) has issued the Rural Co-operative Banks – Miscellaneous (Amendment) Directions, 2025, amending the earlier directions issued on November 28, 2025. These amendments come into effect immediately.
Key Highlights of the Amendment:
- Display of Bank Name: Banks must display their full registered name in all stationery, publicity materials, websites, mobile applications, and advertisements. Abbreviations or logos can be used, but the full name must appear alongside the abbreviated name in equal or larger font, clearly indicating the bank as a co-operative institution.
- Inclusion in the Second Schedule: State co-operative banks (StCBs) meeting enhanced CRAR requirements and without major regulatory concerns may apply for inclusion in the Second Schedule of the RBI Act, 1934. Applications must include audited financials or NABARD inspection reports, along with relevant resolutions and financial documents.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13190
RBI Amends Gold Loan Rules for Commercial Banks
The Reserve Bank of India (RBI) has updated the rules for Gold Metal Loans (GML), which are loans where banks lend gold to eligible borrowers, mainly jewellers. These rules will come into effect from April 1, 2026.
Key points:
- Types of Gold Loans:
- GMS-linked GML: Loans under the Gold Monetization Scheme, repayable in gold, cash, or a combination.
- Import-linked GML: Loans from imported gold, repayable in cash only.
- Eligible Borrowers:
- Jewellers who manufacture or sell jewellery domestically or for export.
- MMTC Limited for minting India Gold Coins under GMS.
- Bank Requirements:
- Banks must set policies on loan limits and borrower eligibility.
- Loans are subject to capital adequacy and risk management rules.
- Banks must monitor that the gold is used properly and not misused.
- Repayment:
- Repayment is mainly in Indian Rupees, with partial/full gold repayment allowed for GMS-linked loans under specified conditions.
- Loan duration is aligned with the jeweller’s working cycle, maximum 270 days for non-export loans.
- Reporting:
- Banks must report all GML data to RBI quarterly.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13194
RBI Updates Gold Metal Loan Guidelines for Small Finance Banks, 2025
The Reserve Bank of India (RBI) has issued the Small Finance Banks – Credit Facilities (Amendment) Directions, 2025, revising the framework for Gold Metal Loans (GML). These amendments will take effect from April 1, 2026.
Key Highlights:
- Types of Gold Loans:
- GMS-linked GML: Loans under the Gold Monetization Scheme, repayable in gold, cash, or a combination.
- Import-linked GML: Loans from imported gold, repayable in cash only.
- Eligible Banks and Borrowers:
- Nominated banks importing gold may lend to jewellers for domestic or export purposes.
- Designated banks under GMS may lend to jewellers and MMTC Limited for minting India Gold Coins.
- Lending and Risk Management:
- Banks must define lending policies, borrower limits, and conduct due diligence.
- Loans are subject to capital adequacy and prudential requirements.
- Mechanisms must monitor gold usage to prevent misuse or unauthorized sale/export.
- Repayment:
- Tenor aligns with the working capital cycle; maximum 270 days for non-export loans.
- Repayment is in Indian Rupees, with GMS-linked loans offering an option for repayment in physical gold under specified conditions.
- Reporting:
- Banks must report GML data to RBI quarterly, as per Annex V format.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13195
RBI Updates Concentration Risk Management Guidelines for Commercial Banks, 2025
The Reserve Bank of India (RBI) has issued the Commercial Banks – Concentration Risk Management (Amendment) Directions, 2025, effective April 1, 2026, revising rules on managing large exposures and intra-group transactions.
Key Highlights:
- Capital Base and Large Exposure Framework (LEF): Eligible Tier I capital, including post-balance sheet infusions and accrued profits, can be used for LEF calculations. Exposure limits for Indian and foreign banks are specified based on bank type and capital.
- Board Responsibilities: Banks must have policies to monitor concentration risks, including exposures to single counterparties, interconnected groups, and ultra-large borrowers.
- Intra-Group Transactions and Exposures (ITE): Guidelines define computation of exposures, prudential limits, and treatment of derivative positions.
- Repeals and Amendments: Chapter IV on enhancing credit supply for large borrowers is repealed from January 1, 2026. Related amendments in asset classification and capital adequacy have also been issued.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13196
RBI Updates Concentration Risk Framework for Small Finance Banks
The Reserve Bank of India has issued the Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Amendment Directions, 2025, amending the existing framework governing concentration risk for Small Finance Banks (SFBs).
Under the amendments, the role of the Board has been strengthened by requiring SFBs to put in place clear policies to manage concentration risk arising from exposures to single counterparties, groups of interconnected counterparties, specific economic sectors, and ultra-large borrowers with significant leverage and system-wide borrowings. While banks may define their own criteria for identifying ultra-large borrowers, overall borrowings from the banking system must be considered in credit assessment.
The amendment also repeals the chapter relating to enhancing credit supply for large borrowers through market mechanisms.
These changes will come into force from January 1, 2026, with the option for banks to implement the revised Board-level concentration risk provisions earlier. Consequential amendments to related directions on income recognition, asset classification, provisioning, and capital adequacy have been issued separately.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13197
RBI Amends Provisioning Norms for Commercial Banks
The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025, further aligning the provisioning framework with recent changes to concentration risk regulations.
Under the amendment, paragraph 117 of Chapter IV (Provisioning Norms) of the existing Directions has been deleted. As a result, banks are permitted to reverse the provisions released pursuant to this change or transfer the same to the General Reserve.
The amendment will come into force from January 1, 2026.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13198
RBI Amends Provisioning Norms for Small Finance Banks
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025, following a review and in consequence of the amendments to the Concentration Risk Management framework for Small Finance Banks.
Under these Amendment Directions, Paragraph 113 of Chapter IV – Provisioning Norms of the existing Directions has been deleted. As a result, Small Finance Banks are permitted to reverse the released provisions or transfer the same to the General Reserve.
The amendment shall come into force from January 1, 2026.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13199
RBI Revises Capital Adequacy Norms for Commercial Banks
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025, following a review consequent to the amendments introduced under the Concentration Risk Management framework.
Through these Amendment Directions, Paragraph 78 under Chapter IV – Risk Weighted Assets (RWAs) of the existing Directions has been deleted.
The amendment shall come into force from January 1, 2026.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13200
RBI Amends Capital Adequacy Framework for Small Finance Banks
The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025, following a review consequent to the amendments under the Concentration Risk Management framework.
Under these Amendment Directions, Paragraph 68 in Chapter IV – Calculation of Risk Weighted Assets (RWAs) of the existing Directions has been deleted.
The amendment shall come into force on January 1, 2026.
https://www.rbi.org.in/Scripts/BS_CircularIndexDisplay.aspx?Id=13201
