Volume 2 Issue 1 (January, 2026)

Reserve Bank of India (Commercial Banks – Credit Risk Management) – Amendment Directions, 2026
The Reserve Bank of India, through the Reserve Bank of India (Commercial Banks – Credit Risk Management) – Amendment Directions, 2026, has further enhanced the credit risk management framework for commercial banks. The changes include the harmonization of definitions with existing corporate laws and insolvency codes, in addition to tighter norms for lending to related parties, which include promoters, directors, and key managerial personnel. The Directions require banks to enhance their board-approved policies, disclosures, and monitoring processes for related party credit. The changes also include the adoption of recusal norms and enhanced internal processes to avoid conflicts of interest. The changes aim to foster better lending practices, promote transparency, and enhance systemic stability in the banking sector.
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Reserve Bank of India (Commercial Banks - Internal Ombudsman) Directions, 2026
The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Internal Ombudsman) Directions, 2026, which aims to further strengthen the internal grievance redressal mechanism of commercial banks. Under the Directions, commercial banks with 10 or more branches are required to appoint an independent Internal Ombudsman (IO), and all cases of wholly or partially rejected grievances would be escalated to the IO through an automated process. Decisions of the IO would be taken in a timely manner, and the IO has the powers to recommend action. The Directions also provide enhanced protection with respect to the appointment of the IO, including the tenure, reporting arrangements, and conflict of interest. This would further strengthen the internal grievance redressal mechanism of commercial banks, which would be beneficial to customers before approaching the RBI's External Ombudsman Scheme.
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Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026
The Reserve Bank of India has issued the Foreign Exchange Management (Export and Import of Goods and Services) Regulations, 2026, under the Foreign Exchange Management Act, 1999, to consolidate and revamp the foreign exchange regulatory regime governing cross-border trade. The new Regulations, which came into effect from 1 October 2026, supercede the earlier export regulations and simplify compliance procedures for export, import, and merchanting business transactions. The new regime specifies revised guidelines on declaration, realization, and repatriation of export proceeds, in addition to improved reporting requirements via RBI’s online monitoring facilities. There is increased reliance on Authorised Dealer banks to monitor and verify compliance with the new regime.
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India and the European Union concluded a historic Free Trade Agreement
On 27 January 2026, the India and the European Union finalized the negotiations of a historic Free Trade Agreement (FTA), which is a significant achievement in the economic relationship between the two parties. The FTA contains significant reductions in tariffs for various products, improved market access for services, and better investment facilitation terms. The FTA will benefit one of the largest markets in the world and is expected to have a substantial impact on trade volumes. The FTA will now go through the process of legal scrubbing and ratification before it is signed and comes into effect.
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IEase of compliance initiative-Review of framework to address the technical glitches in stock brokers electronic trading systems
In January 2026, the Securities and Exchange Board of India (SEBI) has modified its regulatory framework regarding “technical glitches” in the electronic trading systems of stock brokers as part of its Ease of Compliance initiative. The modified framework will now only be applicable to stock brokers who have more than 10,000 registered clients, thus leaving out a large number of smaller stock brokers. SEBI has also clarified what constitutes a “technical glitch” and has given stock exchanges extended timelines to report the same. The regulatory framework has also made technology and reporting requirements more proportionate and risk-based.
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Launch of Revised Forms for the Liquidation Process by IBBI
The Insolvency and Bankruptcy Board of India, by notification dated 2 January 2026, has amended the IBBI (Liquidation Process) Regulations, 2016, to simplify the liquidation reporting regime. The amendment moves away from the traditional regulation-based reporting approach to a more dynamic and form-based electronic reporting system. A new section has been introduced that gives the Board the authority to determine and change the forms and timelines for reporting through notifications, thus increasing the flexibility of the regulatory system. Liquidators are now required to submit the prescribed forms and accompanying documents through the electronic system available on the IBBI website within the notified timelines.
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