Regulatory Alerts2026-07-31
Added · Updated
Reserve Bank of India (Commercial Banks – Fraud Risk Management) Directions, 2026
The Directions apply to Commercial Banks and mandate a Board-approved Fraud Risk Management Policy incorporating Early Warning Signals (EWS), Red Flagging of Accounts (RFA), and compliance with natural justice principles, including a minimum 21-day response period for Show Cause Notices. Banks must constitute a Special Committee of the Board for Monitoring and Follow-up of cases of Frauds, report red-flagged accounts with exposures of ₹3 crore and above on the CRILC platform within seven days, and complete fraud classification processes within 180 days. The framework requires immediate reporting of frauds to Law Enforcement Agencies based on specific monetary thresholds—₹1 crore for Private/Foreign Banks and ₹6 crore for Public Sector Banks—and imposes a five-year debarment from raising funds or seeking credit from RBI-regulated entities for persons or entities classified as fraud. Additionally, banks must establish Data Analytics Units, utilize the Central Fraud Registry, and adhere to strict staff accountability and third-party service provider caution listing procedures.
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