RBI · Banking Regulation
RBI tightens responsible business norms for small finance banks
New amendment mandates stronger customer protection and governance for SFBs effective immediately
What changed
- RBI issued third amendment to Small Finance Banks Responsible Business Conduct Directions
- Binds all scheduled small finance banks under the regulatory framework
The read
The Reserve Bank of India amended its Responsible Business Conduct Directions for small finance banks, raising the bar on customer protection and governance. The third amendment, issued June 24 2026, tightens compliance requirements for scheduled small finance banks. The move signals RBI's intent to align SFB conduct with broader banking norms, after earlier iterations focused on product suitability and transparency. For lenders, the cost of compliance rises; for customers, the safeguard widens. The verdict: a necessary hardening of rules for a fast-growing segment.
Primary source: rbi.org.in