RBI issues Amendment Directions for Repeal of Market Mechanism Framework

The Reserve Bank of India had, on October 1, 2025, issued the draft ‘Guidelines on Enhancing Credit Supply for Large Borrowers through Market Mechanism (Repeal Circular), 2025, seeking feedback from the stakeholders on proposal to repeal the extant instructions issued in 2016.

2. Feedback received on the above draft Repeal Circular has been examined and it has been decided to repeal the extant instructions which were subsequently consolidated in (i) Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025; and (ii) Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Directions, 2025. A statement on the feedback received for the draft Directions is provided in the Annex.

3. Accordingly, the Reserve Bank of India has today issued the following Amendment Directions to repeal the ‘Guidelines on Enhancing Credit Supply for Large Borrowers through Market Mechanism’ as consolidated in Directions mentioned above:

1. Reserve Bank of India (Commercial Banks – Concentration Risk Management) Amendment Directions, 2025

2. Reserve Bank of India (Small Finance Banks – Concentration Risk Management) Amendment Directions, 2025

3. Reserve Bank of India (Commercial Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025

4. Reserve Bank of India (Small Finance Banks – Income Recognition, Asset Classification and Provisioning) Amendment Directions, 2025

5. Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025

6. Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Amendment Directions, 2025

4. Objective of these Amendment Directions is to recalibrate prudential requirements in the wake of strengthening of regulatory framework and supervisory oversight, and improvement in bank balance sheets.

(Brij Raj)           
Chief General Manager

Press Release: 2025-2026/1629