RBI's H1 2026 Regulatory: What It Means for NBFCs?

–By Pinki Jha, CCO (Compliance & Statutory), Oxyzo

During the first half of 2026, all the RBI watchers were well occupied with regulatory rollouts. RBI made four major regulatory moves between January and February. All these regulatory moves together say a lot about where NBFC compliance is to be headed this year.
Let’s have a walkthrough of what all these regulations mean in brief: 

Credit Risk Management (Related Party Lending) Amendment Directions

Issued 5 January 2026, effective 1 April 2026

Under the Credit Risk Management (Related Party Lending) Amendment, the RBI has tightened the rules for governance over related-party lending. The Board now has to sign off on policies covering exposure limits, approval hierarchies, materiality thresholds, and conflict-of-interest safeguards.

Partially, one could also say it means more paperwork, but for good reason. Though Oxyzo is already working with the credit governance frameworks, it has also reviewed the amendment and is aligning wherever applicable. 

NBFC Internal Ombudsman Directions

Issued 14 January 2026

This amendment is genuinely for customers as it introduces an independent review mechanism for specified customer complaints. In fact, for applicable NBFCs this would also lead to an enhancement for Board oversight. 

As the Ombudsman is going to be part of the Board and not the management, this will provide real independence. Oxyzo has also gone through this framework and is tightening up our grievance redressal process to match. 

IRACP Amendment – Provisioning for Default Loss Guarantee (DLG) Arrangements

Issued 13 February 2026

Under the IRACP Amendment, the RBI introduced specific provisioning requirements for eligible DLG-backed portfolios. This was done under the Expected Credit Loss (ECL) framework, providing greater clarity on provisioning practices.

In accordance with these amendments, Oxyzo has assessed the regulatory changes. Thus, we also look towards applicability across relevant business arrangements. 

Statement on Developmental and Regulatory Policies

Issued 6 February 2026

RBI’s February statement touched a lot of areas, but one number stands out: the collateral-free loan limit for Micro and Small Enterprises is doubling, from ₹10 lakh to ₹20 lakh, effective 1 April 2026. RBI also flagged plans to harmonise recovery agent conduct rules and exempt certain small NBFCs from registration requirements.

For lenders like us who work closely with MSMEs, that collateral-free bump is the headline. It opens up credit to businesses with solid cash flows but nothing to pledge. We’ll be watching the recovery agent draft closely as it heads into consultation.

Looking Ahead

Put the four together, and a pattern emerges: sharper board accountability, more sensible provisioning, and easier credit access for small businesses. For NBFCs, staying on top of regulation isn’t just a compliance job anymore; it’s starting to shape lending strategy itself.