The update directly regulates commercial banks' internal credit risk management procedures for classifying wilful defaulters and non-performing assets, which is a core retail banking supervision function affecting deposit-taking institutions' lending practices.
Low confidence — REQUIRES HUMAN REVIEW. This is purely a prudential/credit risk classification directive for banks; no investment services, lending provider, or asset-specific angle is present.
Specialism
The amendment establishes mandatory timelines and classification procedures for banks to identify and declare wilful defaulters, which constitutes a regulatory reporting and supervisory obligation under prudential standards.
Mandatory inheritance: Regulatory Reporting is a child of Supervision, so Supervision must be raised as the secondary tag.
2026-04-28 10:01:56·pthandapani@vixio.com
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Notifications - Reserve Bank of India
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TITLE: India's Reserve Bank Amends Wilful Defaulter Classification Timeline for Commercial Banks
BODY:
On April 27, 2026, the Reserve Bank of India (RBI) issued Amendment Directions to the Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) Directions, 2025. The amendment modifies the timeline for commercial banks to classify borrowers as wilful defaulters following internal preliminary screening.
Under the amended framework, if a wilful default is identified during internal preliminary screening, banks must complete the classification or declaration of a borrower as a wilful defaulter within six months of the account being classified as a non-performing asset (NPA). This classification process must follow the mechanism outlined in the original Directions and align with asset classification instructions contained in the Reserve Bank of India (Commercial Banks – Asset Classification, Provisioning and Income Recognition) Directions, 2026.
The amendment is issued under Section 35A of the Banking Regulation Act, 1949, and represents a consequential update following the issuance of the new Asset Classification, Provisioning and Income Recognition Directions in 2026. The RBI determined the amendment necessary and expedient in the public interest.
The amended directions apply to all commercial banks regulated by the RBI and will come into force on April 1, 2027, providing banks with a transition period to align their internal processes with the revised timeline requirements for wilful defaulter classification.
REFERENCE:
Reserve Bank of India. (2026). Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) - Amendment Directions, 2026. RBI/2026-27/28 DOR.STR.REC.18/20-16-001/2026-27.
Notifications - Reserve Bank of India Skip to main content Selected Selected Language हिंदी Search the Website Search Notifications ( 397 kb ) Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) - Amendment Directions, 2026 RBI/2026-27/28 DOR.STR.REC.18/20-16-001/2026-27 April 27, 2026 Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) - Amendment Directions, 2026 Please refer to Reserve Bank of India ( Reserve Bank of India (Commercial Banks – Treatment of Wilful Defaulters and Large Defaulters) 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. Paragraph 6(2) shall be modified as under: "If wilful default is observed in the internal preliminary screening, a bank shall complete the process of classification/ declaring the borrower as a wilful defaulter by following the mechanism set out in Paragraph 5, within six months of the account being classified as NPA in accordance with the instructions regarding asset classification contained in the Reserve Bank of India (Commercial Banks - Asset Classification, Provisioning and Income Recognition) Directions, 2026 ." 4. The above amendment shall come into force from April 01, 2027. (Vaibhav Chaturvedi) Chief General Manager 2026 All Months January February March April May June July August September October November December 2025 All Months January February March April May June July August September October November December 2024 All Months January February March April May June July August September October November December 2023 All Months January February March April May June July August September October November December 2022 All Months January February March April May June July August September October November December 2021 All Months January February March April May June July August September October November December 2020 All Months January February March April May June July August September October November December 2019 All Months January February March April May June July August September October November December 2018 All Months January February March April May June July August September October November December 2017 All Months January February March April May June July August September October November December Archives 2016 All Months January February March April May June July August September October November December 2015 All Months January February March April May June July August September October November December 2014 All Months January February March April May June July August September October November December 2013 All Months January February March April May June July August September October November December 2012 All Months January February March April May June July August September October November December 2011 All Months January February March April May June July August September October November December 2010 All Months January February March April May June July August September October November December 2009 All Months January February March April May June July August September October November December 2008 All Months January February March April May June July August September October November December 2007 All Months January February March April May June July August September October November December 2006 All Months January February March April May June July August September October November December 2005 All Months January February March April May June July August September October November December 2004 All Months January February March April May June July August September October November December 2003 All Months January February March April May June July August September October November December 2002 All Months January February March April May June July August September October November December 2001 All Months January February March April May June July August September October November December 2000 All Months January February March April May June July August September October November December 1999 All Months January February March April May June July August September October November December 1998 All Months January February March April May June July August September October November December 1997 All Months January February March April May June July August September October November December 1996 All Months January February March April May June July August September October November December 1995 All Months January February March April May June July August September October November December 1994 All Months January February March April May June July August September October November December 1993 All Months January February March April May June July August September October November December 1992 All Months January February March April May June July August September October November December 1991 All Months January February March April May June July August September October November December Top Back to previous page