RBI Amends Regulations: Key Updates & Impact

Mumbai, Dec 4 (PTI) The Reserve Bank on Thursday issued clarification regarding prudential treatment of exposures of foreign bank branches operating in India to their group entities, along with host of amendments to various other regulations.

The amendments to Large Exposures Framework (LEF) and Intragroup Transactions and Exposures also suggests for certain methodological aspects relating to calculation of LEF and intragroup transactions and exposures (ITE).

It further said banks shall have policies on concentration risk management of their exposures towards a single counterparty, groups of interconnected counterparties, specific sectors of the economy as also systems to monitor and address the risks emanating to them from their exposures to ultra-large borrowers.

"While banks can have their own criteria for deciding an ultra-large borrower, they shall take into account inter alia the overall borrowings of such entities from the banking system for credit assessment of such borrowers," the amended directions said.

Besides this, the central bank issued amendments to several other regulations.

The Reserve Bank of India (Commercial Banks - Credit Facilities) Amendment Directions, 2025 has been made to ensure a streamlined and harmonised set of regulations for domestic and exporter jewellers alike for an enhanced ease of doing business, as also to develop a supervisory management information system on gold metal loans.

The central bank also issued 10 amendment directions to modify the extant instructions relating to credit information reporting process for different regulated entities, including banks and NBFCs.

Objective of the 10 amendment directions, RBI said, is to ensure more frequent, accurate and timely reporting of credit information by Credit Institutions (CIs) to Credit Information Companies (CICs), thereby improving the quality and recency of CIRs used in credit underwriting and monitoring.

Extant guidelines stipulate submission of credit information by CIs to CICs at fortnightly or shorter intervals.

Given the increasing reliance of CIs on credit information reports (CIRs) in credit underwriting processes, it is imperative that the CIRs provided by CICs reflect more recent information.