RBI (Commercial Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026.

The Reserve Bank of India (RBI) has, vide directions dated April 29, 2026, issued the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Second Amendment Directions, 2026 (Amendment Directions), to amend the Reserve Bank of India (Commercial Banks – Resolution of Stressed Assets) Directions, 2025 (Principal Directions).   The Amendment Directions come into force with effect from July 1, 2026. The Amendment Directions introduce a dedicated framework for resolution of borrower accounts impacted by natural calamities and specified external events, including riots or disturbances resulting in loss of economic activity.  The key aspects include inter alia the following:

• New framework for calamity-affected accounts: The Amendment Directions insert a new Chapter VI-A dealing with resolution of accounts impacted by calamities, applicable upon declaration of the relevant calamity by the Central or State Government.  Existing relief already granted before the effective date will continue under the earlier prudential guidelines, while any fresh resolution after the effective date must follow the new framework.

• Policy and institutional mechanism: Banks are required to incorporate provisions for calamity-related resolution in their board-approved policy, including principles for relief, possible relief measures, verifiable parameters and delegation for timely implementation.  Upon declaration of a calamity, the SLBC, UTLBC or DCC must convene within 15 days to assess impact, identify affected borrowers and consider the need for moratorium or other resolution measures. Such decisions taken in SLBC, UTLC or DCC meetings must be adequately publicized through various methods like advertisements, field visits or banners. 

• Eligibility and timelines: Only borrower accounts classified as standard, and not in default for more than 30 days as on the date of occurrence of the calamity, are eligible under this framework. Resolution must be invoked within 45 days and implemented within 135 days from the date of declaration of the calamity, with a limited one-time 30-day extension available in exceptional cases.   

• Nature of relief measures: The resolution plan may include rescheduling of payments, conversion of accrued or future interest into another credit facility and sanction of additional finance, subject to assessment of the borrower’s viability.  Banks may also proceed with restructuring or fresh loans without waiting for actual receipt of insurance proceeds, while factoring in Government relief already provided or being provided.   

• Reporting and implementation: SLBC / UTLBC convenor banks must upload calamity notifications on the CIMS portal within 15 days of the special meeting convened for relief measures.  Banks must upload data on relief measures half-yearly within 30 days from the end of each half-year, and file a NIL statement where no relief measures are extended.  

Conclusion:

The Amendment Directions create a time-bound, policy-driven restructuring mechanism for calamity-affected standard accounts and harmonise the treatment of relief measures with credit risk, asset classification, provisioning and responsible business conduct amendments issued on the same date.