The Reserve Bank of India (RBI) released its Statement on Developmental and Regulatory Policies on February 6, 2026, outlining several proactive measures to strengthen customer protection, harmonize regulations, and enhance operational flexibility for regulated entities (REs). These initiatives address critical areas like mis-selling, loan recovery, digital fraud, and lending norms, with draft instructions set for public consultation soon. This signals RBI’s commitment to balancing innovation with prudential oversight in India’s evolving financial landscape.
Here’s a breakdown of the seven key regulatory measures:
- Curbs on Mis-selling via Advertising and Marketing Norms: RBI recognizes the risks of mis-selling financial products, especially third-party ones at bank counters, which can mismatch customer needs and risk profiles. Comprehensive draft instructions for REs on advertising, marketing, and sales practices will be issued shortly for consultation, aiming to safeguard customers and REs alike.
- Harmonized Loan Recovery Guidelines: Currently, fragmented instructions govern recovery agents and conduct for different RE categories. RBI will review and consolidate these into unified draft norms, promoting fair practices across the sector.
- Updated Customer Liability Framework for Digital Transactions: The 2017 guidelines on zero/limited liability in unauthorized e-banking transactions need revision amid rapid tech adoption. Draft revised instructions, including compensation for small-value frauds, will soon go for public feedback.
- Banks’ Lending to REITs with Safeguards: Commercial banks were previously barred from lending to Real Estate Investment Trusts (REITs), unlike InvITs. Now, listed REITs’ strong governance allows such lending under prudential norms, with InvIT guidelines harmonized. Draft directions are forthcoming.
- Relaxed Lending Norms for Urban Cooperative Banks (UCBs): Building on recent flexibilities, RBI proposes rationalizing UCB rules for unsecured loans, nominal member lending limits, and housing loan tenors/moratoriums. A tiered approach ensures discipline while accounting for UCBs’ loan growth; drafts will seek input soon.
- Registration Exemption for ‘Type I’ NBFCs: Under the Scale-Based Framework, low-risk NBFCs (no public funds, no customer interface) with assets under ₹1,000 crore—termed Type I NBFCs—may skip RBI registration if conditions are met. This eases compliance; draft amendments are imminent.
- Simplified Branch Expansion for Gold-Loans NBFCs: NBFC-Investment and Credit Companies (ICC) with over 1,000 gold-collateral lending branches no longer need prior RBI approval for new ones, given their robust frameworks. Draft instructions will invite stakeholder comments.
These measures reflect RBI’s forward-looking strategy to foster trust, efficiency, and growth while mitigating risks. Banks, NBFCs, and UCBs should prepare for consultations to shape final guidelines.
