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LATEST UPDATES
Monetary Policy Statement Feb 6, 2026
Policy repo rate remains unchanged at 5.25 per cent. Consequently, the standing deposit facility (SDF) rate remains at 5.00 per cent and the marginal standing facility (MSF) rate and the Bank Rate at 5.50 per cent.
Enhancement in Collateral free loan limit from ₹10 lakh to ₹20 lakh
With a view to facilitate improved access to formal credit, support entrepreneurial activity and strengthen last mile credit delivery for Micro and Small Enterprises (MSEs) with limited collateral, it has been decided to enhance the limit of collateral free loans to MSEs from ₹10 lakh to ₹20 lakh. The above provisions shall be applicable to all loans to MSE borrowers sanctioned or renewed on or after April 01, 2026.
Union Budget 2025_26 link to the Press Release Press Information Bureau
Limit for collateral free agricultural loans: Limit for collateral free agricultural loans including loans for allied activities raised from the existing level of ₹1.6 lakh to ₹2 lakh per borrower applicable w.e.f. 01.01.2025.
Inoperative Accounts / Unclaimed Deposits in banks: The Reserve Bank on December 2, 2024 issued a circular mandating banks to review annually, accounts with no customer transactions for over a year and ensure segregation of scholarship/ DBT/ EBT accounts to facilitate seamless credit, even if they become inoperative. Banks must streamline the process for activating inoperative accounts, including prominently displaying activation guidelines on websites and branches; to adopt customer-friendly measures like KYC updation through digital and non-home branch channels.
UPI Lite wallet limit revised: UPI Lite wallet limit enhanced to ₹5,000 and per-transaction limit to ₹1,000.
Review of limit of Bulk Deposits for Scheduled Commercial Banks (excluding RRBs), Small Finance Banks and Local Area Banks: As per RBI guidelines, it is proposed to revise the definition of bulk deposits as ‘Single Rupee term deposits of ₹3 crore and above’ for SCBs (excluding RRBs) and SFBs; for Local Area Banks as ‘Single Rupee term deposits of ₹1 crore and above’ as applicable in case of RRBs.
Conditions for Upgrade to Standard: For MSME accounts where aggregate exposure of the lenders is less than ₹25 crores (Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dt 02.04.2024)
An account may be considered for upgradation to ‘standard’ only if it demonstrates satisfactory performance during the specified period. ‘Specified Period’ means a period of one year from the commencement of the first payment of interest or principal, whichever is later, on the credit facility with longest period of moratorium under the terms of restructuring package. ‘Satisfactory Performance’ means no payment (interest and/or principal) shall remain overdue for a period of more than 30 days. In case of cash credit / overdraft account, satisfactory performance means that the outstanding in the account shall not be more than the sanctioned limit or drawing power, whichever is lower, for a period of more than 30 days.
Conditions for Upgrade to Standard for all accounts other than MSME less than ₹25 crores (Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dt 02.04.2024)
Standard accounts classified as NPA and NPA accounts retained in the same category on restructuring by the lenders may be upgraded only when all the outstanding loan / facilities in the account demonstrate ‘satisfactory performance during the period from the date of implementation of RP up to the date by which at least 10 per cent of the sum of outstanding principal debt as per the RP and interest capitalisation sanctioned as part of the restructuring, if any, is repaid (‘monitoring period’).
Provided that the account cannot be upgraded before one year from the commencement of the first payment of interest or principal (whichever is later) on the credit facility with longest period of moratorium under the terms of RP.
Restructuring of frauds/willful defaulters (Master Circular - Prudential norms on Income Recognition, Asset Classification and Provisioning pertaining to Advances dt 02.04.2024)
Borrowers who have committed frauds/ malfeasance/ willful default will remain ineligible for restructuring. However, in cases where the existing promoters are replaced by new promoters, and the borrower company is totally delinked from such erstwhile promoters/management, lenders may take a view on restructuring such accounts based on their viability, without prejudice to the continuance of criminal action against the erstwhile promoters/management.
Categories of NPAs
Banks are required to classify non-performing assets further into the following three categories based on the period for which the asset has remained non-performing and the realisability of the dues:
Substandard Assets
Doubtful Assets
Loss Assets
Substandard Assets
With effect from March 31, 2005, a substandard asset would be one, which has remained NPA for a period less than or equal to 12 months. Such an asset will have well defined credit weaknesses that jeopardise the liquidation of the debt and are characterised by the distinct possibility that the banks will sustain some loss, if deficiencies are not corrected.
Doubtful Assets
With effect from March 31, 2005, an asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months. A loan classified as doubtful has all the weaknesses inherent in assets that were classified as substandard, with the added characteristic that the weaknesses make collection or liquidation in full, – on the basis of currently known facts, conditions and values – highly questionable and improbable.
Loss Assets
A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection, but the amount has not been written off wholly. In other words, such an asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value.
Differential Rate of Interest (DRI) Scheme
Under the DRI Scheme, banks provide finance up to ₹15,000/- at a concessional rate of interest of 4 per cent per annum to the weaker sections of the community for engaging in productive and gainful activities. In order to ensure that persons belonging to SCs/STs also derive adequate benefit under the DRI Scheme, banks have been advised to grant eligible borrowers belonging to SCs/STs such advances to the extent of not less than 2/5th (40 percent) of total DRI advances. Further, the eligibility criteria under DRI, viz. size of land holding should not exceed 1 acre of irrigated land and 2.5 acres of unirrigated land, are not applicable to SCs/STs. Members of SCs/STs satisfying the income criteria of the scheme can also avail of housing loan up to ₹20,000/- per beneficiary over and above the individual loan of ₹15,000/- available under the scheme.
Bulk FD limit for RRBs raised to Rs 1 crore
In an effort to raise more funds, RBI has upped the criteria for ‘bulk deposits’ for Regional Rural Banks (RRBs) from the current Rs. 15 lakhs to Rs. 1 crore. According to the amended rules, Bulk Deposit means Single Rupee term deposits of Rs. 2 crore and above for SCBs (excluding RRBs) and Small Finance Banks (SFBs) and Single Rupee term deposits of Rs. 1 crore and above for RRBs.
Customers to benefit from premature withdrawal facility for TDs up to ₹1 crore
In a welcome move, all domestic Term Deposits (TDs) of ₹1 crore and below received from individual customers shall now benefit a premature withdrawal facility, after the RBI’s decision to hike the non-callable limit from ₹15 lakh to ₹ 1 crore. Non-callable FDs are those that do not give premature withdrawal facility. Money invested in these FDs remains locked till end of maturity period. Now, RBI has mandated that customers of all commercial and co-operative banks be allowed to prematurely withdraw money from Fixed Deposits (FDs) of up to Rs. 1 crore. This facility shall also be applicable for Non-Resident (External) Rupee (NRE) Deposit/Ordinary Non-Resident (NRO) Deposits.
Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC)
The CEGSSC was launched by Ministry of Social Justice & Empowerment on May 6, 2015 with the objective of promoting entrepreneurship amongst the Scheduled Castes (SCs), by providing credit enhancement guarantee to Member Lending Institutions (MLIs), which extend financial assistance to these entrepreneurs. IFCI Ltd. has been designated as the Nodal Agency under the scheme, to issue the guarantee cover in favour of MLIs for financing SC entrepreneurs.
Individual SC entrepreneurs/Registered Companies and Societies/Registered Partnership Firms/Sole Proprietorship firms having more than 51% shareholding and management control for the previous 6 months by SC entrepreneurs/ promoters/ members are eligible for guarantee from IFCI Ltd. against the loans extended by MLIs.
The amount of guarantee cover under CEGSSC ranges from a minimum of ₹0.15 cr to a maximum of ₹5.00 cr.
The tenure of guarantee is up to a maximum of 7 years or repayment period, whichever is earlier.
Risk-weight increased for Unsecured Loans
Risk-weight for unsecured personal loans and loans on credit cards, from 100% to 125%.
RBI issues new rules on inoperative, unclaimed savings accounts, FD, deposits
The Reserve Bank of India (RBI) has issued comprehensive guidelines on the measures to be implemented by the banks covering various aspects of how to classify deposits and accounts as unclaimed deposits and inoperative accounts respectively, periodic review of such deposits and accounts, fraud prevention measures to be taken for tracing the customers of unclaimed deposits and inoperative accounts, including their nominees/legal heirs for account reactivation, settlement of claims or closure to be followed. According to the new guidelines, only customer induced transactions, and not bank induced transactions, shall be considered for the purpose of classifying an account as ‘inoperative’. Banks are required to conduct an annual examination of accounts if there haven’t been any customer-initiated transactions for more than a year. If an account is deemed inoperative, the banks are not allowed to impose penalties for failing to maintain the required minimum amounts. Activating inactive accounts will not incur any fees. The revised instructions shall come into effect from April 1, 2024.
Enhancing UPI transaction limit for Specified Categories
To encourage the use of UPI for medical and educational services, it is proposed to enhance the limit for payments to hospitals and educational institutions from ₹1 lakh to ₹5 lakh per transaction. Earlier, in December 2021, the transaction limit for UPI payments for Retail Direct Scheme and for IPO subscriptions were increased to ₹5 lakh.
Classification of MSMEs _ URC
The Reserve Bank on December 28, 2023 amended the Master Direction on ‘Lending to Micro, Small & Medium Enterprises (MSME) Sector’. As per the amendment the existing Para 2.2 of the direction was revised as ‘All the above enterprises are required to register online on the Udyam Registration portal and obtain ‘Udyam Registration Certificate’. For PSL purposes banks shall be guided by the classification recorded in the Udyam Registration Certificate (URC).
Shri Manoranjan Mishra appointed as RBI Executive Director
The Reserve Bank on November 1, 2023 appointed Shri Manoranjan Mishra as Executive Director with effect from November 1, 2023. Prior to being promoted as Executive Director.
UDGAM Portal
The Reserve Bank on October 5, 2023 informed that the search facility in UDGAM portal has been made available for 30 banks on September 28, 2023, which covers around 90 per cent of unclaimed deposits (in value terms) in Depositor Education and Awareness (DEA) Fund. The Reserve Bank on August 17, 2023 developed a Centralised Web Portal उद्गम UDGAM (Unclaimed Deposits – Gateway to Access inforMation) for use by members of public to facilitate and make it easier for them to search their unclaimed deposits across multiple banks at one place.