RBI invites comments on the Draft “Reserve Bank of India (Lending to Related Parties) Directions, 2025”

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....BI invites comments on the Draft “Reserve Bank of India (Lending to Related Parties) Directions, 2025”<BR>FEMA & RBI<BR>Dated:- 4-10-2025<BR><BR>In pursuance of the announcement made in the&nbsp;Statement on Developmental and Regulatory Policies dated December 08, 2023, the Reserve Bank of India (RBI) has today issued the draft regulatory framework, for public comments, on lending to related p....

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....arties by various regulated entities (REs), as enumerated below: * Reserve Bank of India (Commercial Banks - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (Small Finance Banks - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (Regional Rural Banks - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (Local Area Banks - L....

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....ending to Related Parties) Directions, 2025 * Reserve Bank of India (Urban Co-operative Banks - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (Rural Co-operative Banks - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (Non-Banking Financial Companies - Lending to Related Parties) Directions, 2025 * Reserve Bank of India (All India Financi....

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....al Institutions - Lending to Related Parties) Directions, 2025 The draft Directions provide a harmonised, principle-based framework to be adopted by REs for&nbsp;inter alia&nbsp;lending to related parties, suitably rationalising the existing provisions. The key provisions of the proposed framework entail the following: * Introduction of scale-based materiality thresholds beyond which lending ....

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....to related parties of a RE shall need approval of the Board or its Committee. * Exclusion of Independent Directors of other banks from the scope of 'related persons' of a RE for the purpose of these Directions. * Principle based exemption from Section 20 (1) (b) of the Banking Regulation Act, 1949 for certain types of loans. * Suitable supervisory reporting and disclosure requirements ....

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....by REs on transactions with related parties. The Comments on the draft Direction are invited from public/stakeholders by October 31, 2025. The comments/ feedback may be submitted through the link under the 'Connect2Regulate' Section available on the Reserve Bank's website. Comments may alternatively be forwarded to The Chief General Manager, Credit Risk Group, Department of Regulation, Central Of....

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....fice Reserve Bank of India, 12th/ 13th Floor Shahid Bhagat Singh Marg, Fort Mumbai - 400 001 or by&nbsp;email. (Brij Raj)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Chief General Manager<BR> News - Press release - PIB....