What changed
The amendment revises the explanatory note to paragraph 237(5) of the 2025 Directions, replacing the earlier reference with a directive that loan classification must follow the 2026 Directions. No other substantive changes are made. The amendment is issued under the RBI’s powers under section 35A of the Banking Regulation Act, 1949.
What it means for you
Banks will need to review their loan classification policies and ensure they align with the 2026 framework from 1 April 2027. This may affect provisioning calculations, risk assessment, and reporting. Compliance will be monitored through RBI’s supervisory mechanisms.
What you must do
- Review current loan classification methodology
- Map existing classifications to the 2026 framework
- Update internal policies and systems accordingly
- Communicate changes to risk and compliance teams
- Prepare for supervisory review post 1 April 2027
Who it affects
Commercial banks, Risk management teams, Compliance officers
When does the amendment take effect?
The amendment becomes operative on 1 April 2027.
What is the main change introduced?
Loan classification must now follow the 2026 Asset Classification, Provisioning and Income Recognition Directions.
Who issued the amendment?
The RBI issued the amendment under section 35A of the Banking Regulation Act, 1949, signed by Chief General Manager Vaibhav Chaturvedi.