On November 28, 2025, the Reserve Bank of India (RBI) issued a landmark circular consolidating and streamlining regulatory directions across various banking and financial sectors. This pivotal move aims to enhance compliance, promote transparency, and ensure uniformity in regulatory guidelines. RBI finally issued 244 Master Directions containing all current instructions of the Department of Regulation. These have been arranged function-wise and by category of regulated entity.

Key Highlights:

Access and Structure of the New Directions
The new 244 Master Directions have been published under the notifications section on the RBI website. Each direction deals with a separate regulatory area for a specific category of financial institutions [The 11 types of regulated entities identified are: (a) Commercial Banks; (b) Small Finance Banks; (c) Payments Banks; (d) Local Area Banks; (e) Regional Rural Banks; (f) Urban Co-operative Banks; (g) Rural Co-operative Banks; (h) All India Financial Institutions; (i) NonBanking Financial Companies; (j) Asset Reconstruction Companies; and (k) Credit Information Companies]. RBI said that these 244 directions collate all instructions on an as-is basis without changing the existing regulatory requirements. The list of 9,445 circulars, which are being withdrawn or repealed, has also been issued along with the Master Directions.

Outcome of the Consolidation

The documents are now the single source for all instructions issued by the Department of Regulation. For instance, all circulars applicable to commercial banks have been covered under 32 master directions and Banks will need to only follow these directions. FAQs have been merged into the main text for regulatory clarity, and illustrations are now embedded within the directions rather than being left as annexes. The consolidation process often involves clarifying overlapping or conflicting provisions that may have existed across different individual circulars. This task reduces the ambiguity and will ensure clearer understanding of compliance obligations. Going forward, amendments will be incorporated through colour-coded updates, maintaining continuity with the existing system of tracking changes. Training staff on regulatory requirements becomes more straightforward and less time-consuming when all relevant information is presented in a cohesive manner.

Key actionable of Regulated Entities (RE):

• RE will have to systematically review the entire consolidated master directions to fully grasp the scope, changes, and implications for all business functions and product lines.
• RE to compare the new directions against all current internal policies, procedures, manuals, and standard operating procedures (SOPs). RE to pinpoint areas where existing practices or documentation deviate from the new consolidated framework, as well as any new requirements that need to be incorporated and categorize identified gaps and changes based on criticality, regulatory deadlines, and potential impact on operations or financial health.
  • RE to update the institution’s comprehensive compliance manual to reflect the consolidated directions as the definitive source of regulatory truth.
  • RE to amend operational procedures (workflows, including those related to credit assessment, disbursement, monitoring, recovery, risk mitigation, customer onboarding (KYC/AML), and grievance redressal).
  • RE to update Risk Management Frameworks. RE to update internal reporting i.e. dashboards and metrics to track compliance with the new directions and external regulatory reporting i.e. align regulatory reporting with any new templates or requirements specified in the consolidated directions.
  • RE to actively participate in any industry forums or discussions initiated by the RBI and seek formal clarifications from the RBI on any ambiguous provisions to ensure accurate interpretation and implementation.

By taking these actionable steps, banks and NBFCs can effectively follow the transition to the new consolidated regulatory regime, and strengthen their compliance.

– Authored by Sweta Mehta, Associate Partner