RBI Issues Amendment Directions for All India Financial Institutions – Calamity Relief Provisions Introduced
Overview of the Amendment
The Reserve Bank of India, exercising its powers under Section 45L of the Reserve Bank of India Act, 1934, formally notified the Reserve Bank of India (All India Financial Institutions – Responsible Business Conduct) Amendment Directions, 2026 on April 29, 2026. This regulatory action carries reference number RBI/2026-27/74 DOR.STR.REC.63/21-04-048/2026-27 and is set to take effect from July 1, 2026.
The amendment is directly linked to the earlier issuance of the Reserve Bank of India (All India Financial Institutions – Resolution of Stressed Assets) Amendment Directions, 2026, also dated April 29, 2026, and builds upon the evolving framework governing the conduct of All India Financial Institutions (AIFIs) in India.
Background and Context
All India Financial Institutions operate under a structured regulatory framework laid down by the Reserve Bank of India. The Responsible Business Conduct Directions form a key pillar of this framework, outlining how AIFIs are expected to engage with their customers, particularly in circumstances that may cause financial distress.
The newly introduced amendment follows revisions made to the stressed assets resolution framework and signals the Reserve Bank's intent to ensure that AIFIs respond proactively and compassionately when natural disasters or other declared calamities affect the regions in which their borrowers reside. The amendment underscores a broader regulatory philosophy — that institutional responsibility does not diminish during crisis periods but, in fact, becomes more pronounced.
Note: This amendment is specifically applicable to All India Financial Institutions (AIFIs) and introduces discretionary powers enabling relief to borrowers situated in calamity-declared areas.
Key Amendment: Insertion of Part B in Chapter IV
The substantive change effected by this amendment involves the insertion of a new Part B under Chapter IV – Miscellaneous Instructions of the principal Directions. The newly added provision reads as follows:
Clause 33A – Measures in Case of Declaration of Calamity
"An AIFI at its discretion, may provide relief measures such as waiver / reduction of various fees and charges in respect of customers in the areas where a calamity has been declared, for a period not exceeding one year."
This single provision carries significant operational and customer-protection implications, which are detailed in the sections below.