What changed
The amendment inserts definitions for 'date of invocation' and 'natural calamity' (linked to NDRF/SDRF), and adds a new Chapter VI-A for resolution of accounts impacted by calamities. It requires AIFIs to have board-approved policies with objective principles for relief measures, delegation matrices, and timely implementation. SLBC/UTLBC/DCC meetings must be convened within 15 days of a calamity declaration.
What it means for you
AIFIs must now follow a structured framework for resolving stressed assets due to natural calamities or external events, ensuring consistency across regulated entities. This harmonizes prudential norms and mandates proactive coordination through SLBC/UTLBC/DCC meetings. Banks need to update their board-approved policies to include specific relief measures and delegation processes, impacting how they handle borrower accounts in disaster-affected areas.
What you must do
- Update board-approved policies to include objective principles for relief measures, verifiable parameters, and delegation matrix for calamity-related resolution.
- Ensure SLBC/UTLBC convenor banks schedule special meetings within 15 days of a calamity declaration for affected areas.
- Review existing borrower accounts with prior relief measures; fresh resolutions after the effective date of the Amendment Directions (April 29, 2026) must follow new Chapter VI-A guidelines.
- Train staff on the new definitions of 'date of invocation' and 'natural calamity' to ensure consistent application.
Who it affects
All India Financial Institutions (AIFIs), Borrowers in areas affected by natural calamities or external events like riots, SLBC/UTLBC/DCC convenor banks and members
What is the 'date of invocation' under the new amendment?
It is the date when the borrower and AIFI agree to proceed with a resolution plan under Chapter VI-A through a documented arrangement, except in cases of deemed invocation as specified in paragraph 119N.
Does this apply to accounts that already received relief measures before the effective date of the Amendment Directions (April 29, 2026)?
No, existing accounts with prior relief measures continue under old guidelines. However, any fresh resolution in those accounts after the effective date must follow the new Chapter VI-A.
What triggers the SLBC/UTLBC/DCC meeting requirement?
A declaration of calamity by Central/State governments. If a larger part of a state/UT is affected, SLBC/UTLBC convenor must meet within 15 days; for smaller areas, DCC convenor does so after consulting SLBC/UTLBC.