India RBI Banking Regulatory Enforcement Actions — October 01, 2026

01-10-2026

The Reserve Bank of India (RBI) has extended its regulatory directions under Section 35A of the Banking Regulation Act, 1949, for The Industrial Co-operative Bank Ltd., Guwahati, for a further three months, from October 04, 2026, to January 04, 2027. The extension indicates ongoing supervisory concerns about the bank's financial position, as the RBI explicitly notes that the extension should not be construed as satisfaction with the bank's financial health.

• · The initial directive was issued on July 03, 2025, for six months, and was previously extended to October 04, 2026.
• · The extension is subject to review.
• · Other terms and conditions of the directive remain unchanged.

01-10-2026

The Reserve Bank of India (RBI) issued the Reserve Bank of India (Small Finance Banks - Acquisition and Holding of Shares or Voting Rights) Amendment Directions, 2026, effective immediately. The amendment introduces a one-time approval process for mutual funds, insurance companies, and pension funds (qualifying persons) to acquire up to 10% of the paid-up share capital or voting rights in a small finance bank without needing separate prior approval for each subsequent acquisition, provided they are not part of the bank's promoter group. The amendment also clarifies that client acquisitions via a portfolio manager are not treated as indirect acquisitions if certain conditions are met.

• · The amendment modifies the Master Direction issued on November 28, 2025.
• · One-time approval can be granted either individually or collectively to qualifying persons.
• · The one-time approval may be revoked if the qualifying person is found not 'fit and proper' or fails to comply with conditions.
• · Qualifying persons with one-time approval must report any decrease or increase of aggregate holding crossing the 5% threshold within three working days.
• · The amendment also clarifies that a client's acquisition via a portfolio manager is not treated as indirect acquisition if the client is the registered owner, the portfolio manager provides only non-binding advice, and voting rights are based on a specific client mandate.

01-10-2026

The Reserve Bank of India issued the (Commercial Banks - Acquisition and Holding of Shares or Voting Rights) Amendment Directions, 2026, effective October 1, 2026. The amendment introduces a one-time approval mechanism for mutual funds, insurance companies, and pension funds (qualifying persons) for subsequent acquisitions of major shareholding up to 10% in a banking company, subject to conditions. It also clarifies that portfolio managers may avoid indirect acquisition treatment if certain conditions are met, and imposes reporting obligations for holdings crossing the 5% threshold.

• · The amendment modifies the Master Direction issued on November 28, 2025.
• · One-time approval can be granted individually or collectively to qualifying persons.
• · Qualifying persons include mutual funds registered with SEBI, pension funds registered with PFRDA, and insurance companies registered with IRDAI.
• · The one-time approval may be revoked if the qualifying person is found not 'fit and proper' or fails to comply with conditions.
• · Portfolio managers are not deemed to indirectly acquire shares if the client is the registered owner, exercises voting rights, and the manager provides only non-binding advice.
• · Reporting of holdings crossing above or below 5% must be done within three working days.

01-10-2026

The Reserve Bank of India issued an amendment to the Local Area Banks (Acquisition and Holding of Shares or Voting Rights) Directions, 2026, effective immediately. The key change grants a one-time approval mechanism for mutual funds, insurance companies, and pension funds (qualifying persons) to acquire up to 10% major shareholding in a banking company without needing repeated prior approvals for subsequent acquisitions, subject to conditions. This regulatory easing aims to streamline investment by institutional investors in local area banks while maintaining oversight through reporting and fit-and-proper requirements.

• · The amendment modifies the Master Direction issued on November 28, 2025.
• · One-time approval is available for subsequent acquisitions of major shareholding up to 10% of paid-up share capital or voting rights.
• · Qualifying persons must not belong to the promoter group of the investee banking company.
• · The one-time approval can be revoked by RBI for non-compliance or if the person is found not 'fit and proper'.
• · Major shareholders with one-time approval must report any crossing of the 5% threshold within three working days.
• · Applications for one-time approval can also be made by a bank on behalf of a qualifying person belonging to the promoter group or group of the bank.

01-10-2026

The Reserve Bank of India issued the Reserve Bank of India (Payments Banks - Acquisition and Holding of Shares or Voting Rights) Amendment Directions, 2026, effective immediately on October 1, 2026. The amendment permits mutual funds, insurance companies and pension funds meeting specified criteria to seek one-time approval for subsequent acquisitions of major shareholding up to 10 per cent of a banking company’s paid-up share capital or voting rights, while initial major-shareholding acquisitions continue to require prior RBI approval.

• · The directions amend the Reserve Bank of India (Payments Banks – Acquisition and Holding of Shares or Voting Rights) Directions, 2025, issued on November 28, 2025.
• · A qualifying person must be a mutual fund registered with the Securities and Exchange Board of India, a pension fund registered with the Pension Fund Regulatory and Development Authority, or an insurance company registered with the Insurance Regulatory and Development Authority of India.
• · A qualifying person must not belong to the promoter group of the investee banking company.
• · One-time approval may be granted individually or collectively and may be revoked for non-compliance or failure to remain fit and proper.
• · The one-time approval application must be submitted through PRAVAAH, with the banking company required to furnish comments in Form A1.
• · The amendment was issued under Sections 12, 12B and 35A of the Banking Regulation Act, 1949.
• · The filing reference is RBI/2026-27/277 and DOR.HOL.REC.No.237/16.13.100/2026-27.

01-10-2026

The Reserve Bank of India (RBI) issued a master circular consolidating all existing guidelines for scheduled commercial banks on extending credit facilities to Scheduled Castes (SCs) and Scheduled Tribes (STs). The circular outlines measures for planning, lending procedures, monitoring, and reporting to enhance credit flow to these communities. Key schemes include the Differential Rate of Interest (DRI) Scheme with loans up to ₹15,000 at 4% interest and the Credit Enhancement Guarantee Scheme for Scheduled Castes (CEGSSC) offering guarantees from ₹0.15 cr to ₹5.00 cr.

• · The circular consolidates 21 previous circulars issued by RBI on this subject, listed in an appendix.
• · Loan applications from SC/ST borrowers under government programs must be rejected at the next higher level, not at the branch level, with reasons clearly indicated.
• · Banks are required to set up a special cell at their Head Office to monitor credit flow to SC/ST beneficiaries.
• · Banks must review measures to enhance credit flow to SC/ST borrowers on a quarterly basis.
• · The SLBC Convenor bank must invite a representative from the National Commission for SCs/STs to SLBC meetings.