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On April 29, 2026, the Reserve Bank of India (RBI) issued amendment directions to the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025. The amendments establish a new framework for resolving exposures of non-banking financial companies (NBFCs) affected by natural calamities and external events such as riots or disturbances. The RBI introduced Chapter VI-A to the directions, which establishes a dedicated resolution mechanism for calamity-impacted borrowers. Eligible borrowers are those with accounts classified as 'Standard' and not in default for more than 30 days as of the calamity date. NBFCs may implement resolution plans upon recommendations from State Level Bankers' Committees (SLBCs), Union Territory Level Bankers' Committees (UTLBCs), or District Consultative Committees (DCCs). Resolution must be invoked within 45 days of calamity declaration and implemented within 135 days. The amendments permit NBFCs to invoke resolution suo moto without waiting for formal borrower requests, with borrowers retaining the option to opt out until day 135. Relief measures may include payment rescheduling, conversion of accrued interest into credit facilities, and sanction of additional finance. The framework requires NBFCs to factor in insurance proceeds, government interest subvention schemes, and relief already provided by state or central governments. For agricultural loans, revenue certificates may substitute original title records in affected areas. NBFCs must report relief measures half-yearly by September 30 and March 31 on the Centralized Information Management System (CIMS) portal. Consequential amendments were issued to the Credit Risk Management, Income Recognition Asset Classification and Provisioning, and Responsible Business Conduct directions. The amendments become effective July 1, 2026.

On April 29, 2026, the Reserve Bank of India (RBI) issued amendment directions to the Reserve Bank of India (Non-Banking Financial Companies – Resolution of Stressed Assets) Directions, 2025. The amending directions prescribe: Definitions and board policies including introducing definitions for the date of invocation and natural calamity, and mandating that a non-banking financial company (NBFC) incorporate provisions for resolution into its board-approved policy, outlining objective principles for relief, verifiable parameters, and a delegation matrix for timely implementation. Scope of calamity resolutions stipulating that chapter VI-A shall govern resolutions for borrowers impacted by declared natural calamities or external events causing economic loss, clarifying that these instructions apply to fresh resolutions and do not apply to a NBFC's refinance portfolio, and requiring that decisions from special bankers' committee meetings be adequately publicized. Eligibility and implementation timelines requiring that eligible borrowers' accounts must be classified as standard and not in default for more than 30 days on the calamity occurrence date, and mandating that resolution must be invoked no later than 45 days and implemented within 135 days from the calamity declaration date. Resolution plans and ancillary measures outlining that resolution plans may include rescheduling payments, converting accrued interest, or sanctioning additional finance based on viability assessments, and allowing a NBFC to implement a plan while providing the borrower an opt-out option, factoring in insurance proceeds, and accepting alternative land ownership certificates for agricultural loans. Reporting requirements mandating that a NBFC upload data on relief measures half-yearly to the CIMS portal, or submit a 'NIL' statement if no measures are extended. The amendments will come into force with effect from July 1, 2026.

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India's Reserve Bank Amends Non-Banking Financial Company Stressed Asset Resolution Directions

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Reserve Bank of India Amends Non-Banking Financial Company Stressed Asset Resolution Directions