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RBI Amends Credit Facility Directions for Banks

Current · Source: Reserve Bank of India · RBI/2026-27/25 · issued 27 Apr 2026 · ~2 min read

Quick answerRBI has updated the Commercial Banks – Credit Facilities Directions, 2025 to align asset classification, provisioning, and risk weight rules with new 2026 directions. Key changes include referencing the new ACPIR and capital charge directions, and deleting paragraph 172(3)(ii). Effective April 1, 2027.

The rule, in the simplest words

Banks must use the new 2026 rules (called ACPIR Directions) to decide if a loan is 'bad' (NPA) and how much money to set aside (provisioning).
For project finance loans (big loans for building things like roads or factories), banks must follow the new 2026 rules to decide if the loan is NPA before the project starts (DCCO).
Some loans need extra safety money (risk weight) and provisioning as per the new 2026 rules for credit risk (Capital Charge for Credit Risk – Standardised Approach).
One old rule (paragraph 172(3)(ii)) has been removed, so banks don't need to follow it anymore.
All these changes start on April 1, 2027.

How it plays out — a real example

A credit & lending officer in Indore is reviewing a project finance loan for a new factory. She checks the new 2026 ACPIR Directions to see if the loan should be marked as NPA because the factory hasn't started yet (before DCCO). She also updates her bank's system to remove the old rule (paragraph 172(3)(ii)) so her team doesn't accidentally use it.

What changed

RBI issued the Second Amendment Directions, 2026 to the Commercial Banks – Credit Facilities Directions, 2025. It replaces references in paragraphs 25(1), 84, and 132 with the new 2026 directions on asset classification, provisioning, and capital charge for credit risk. Additionally, paragraph 172(3)(ii) has been deleted entirely.

What it means for you

Banks must now apply the updated asset classification and provisioning norms from the 2026 ACPIR Directions for individual loans and project finance accounts before DCCO. Risk weights and provisioning for certain exposures will follow the new standardised approach for credit risk. The deletion of paragraph 172(3)(ii) removes a specific provision, likely simplifying compliance.

What you must do

Update internal policies and systems to reference the new 2026 ACPIR and capital charge directions for asset classification, provisioning, and risk weights.
Train credit and risk teams on the revised NPA classification rules for project finance accounts before DCCO.
Review and adjust reporting templates to reflect the deletion of paragraph 172(3)(ii) from the Directions.
Prepare for the April 1, 2027 effective date by conducting impact assessments on existing loan portfolios.

Who it affects

Commercial banks in India, Credit risk management teams, Loan operations and compliance departments, Project finance lenders

❓ Common questions

Regulatory timeline

Stated effective date Effective April 1, 2027
Decoded by BankPulse 2026-06-17 15:01 IST

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

When do these amendments take effect?

The amendments come into force from April 1, 2027, giving banks time to align their processes.

What is the significance of deleting paragraph 172(3)(ii)?

The deletion removes a specific provision from the Directions, likely simplifying regulatory requirements. Banks should check if any related reporting or compliance obligations are affected.

Do these changes affect existing loan accounts?

Yes, from the effective date, asset classification and provisioning for all individual loans and project finance accounts must follow the new 2026 directions, impacting existing accounts as well.

📜 Read the original circular — full text as issued by RBI

RBI/2026-27/25
 DOR.STR.REC.13/07-01-001/2026-27 
 April 27, 2026
 Reserve Bank of India (Commercial Banks – Credit Facilities) Second Amendment Directions, 2026
 Please refer to Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025 (hereinafter referred to as ‘the Directions’).
 2. Consequent to the issuance of Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 and in exercise of the powers conferred by the section 35A of the Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
 3. The Amendment Directions shall modify the Directions as below:
 (1) The paragraph 25(1) of the Directions shall be modified as below:
 “Asset classification of individual loan assets and consequent provisioning requirement shall be in terms of the Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 .”
 (2) The paragraph 84 of the Directions shall be modified as below:
 “A project finance account may be classified as NPA during any time before actual DCCO as per record of recovery, in terms of the Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 .”
 (3) The paragraph 132 of the Directions shall be modified as below:
 “The above exposures shall attract risk weight and provisioning, in terms of the regulatory requirements, as contained in Reserve Bank of India (Commercial Banks - Capital Charge for Credit Risk – Standardised Approach) Directions, 2026 and Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 , as amended from time to time.”
 (4) The paragraph 172(3)(ii) stands deleted.
 4. The above amendments shall come into force from April 01, 2027.
 (Vaibhav Chaturvedi)
 Chief General Manager

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/25 · issued 27 Apr 2026. The plain-English explanation above is BankPulse’s own independent summary.

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Who does what — compliance checklist

💰 Credit

Update internal policies and systems to reference the new 2026 ACPIR and capital charge directions for asset classification, provisioning, and risk weights.
Train credit and risk teams on the revised NPA classification rules for project finance accounts before DCCO.

📜 Compliance

Review and adjust reporting templates to reflect the deletion of paragraph 172(3)(ii) from the Directions.
Prepare for the April 1, 2027 effective date by conducting impact assessments on existing loan portfolios.

Grouped from the action items above — a single circular may involve more than one team.

Worked example & action-note template

Example: if you are a Credit Manager at a bank this circular applies to (Commercial banks in India, Credit risk management teams, Loan operations and compliance departments, Project finance lenders), your first concrete step on “RBI Amends Credit Facility Directions for Banks” is: “Update internal policies and systems to reference the new 2026 ACPIR and capital charge directions for asset classification, provisioning, and risk weights.” (RBI issued this 27 Apr 2026).

Circular: RBI/2026-27/25 -- RBI Amends Credit Facility Directions for Banks
Issued: 27 Apr 2026
Action required: Update internal policies and systems to reference the new 2026 ACPIR and capital charge directions for asset classification, provisioning, and risk weights.
Action required: Train credit and risk teams on the revised NPA classification rules for project finance accounts before DCCO.
Action required: Review and adjust reporting templates to reflect the deletion of paragraph 172(3)(ii) from the Directions.
Action required: Prepare for the April 1, 2027 effective date by conducting impact assessments on existing loan portfolios.
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________

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BankPulse Compliance Evidence Pack — generated 02 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13395&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.