India tightens foreign bank rules by 2026, capping exposures and boosting credit reporting.

The Reserve Bank of India has updated financial regulations to strengthen risk management, requiring foreign bank branches in India to include overseas exposures in their Large Exposures Framework, calculated on a gross basis without netting. Effective April 1, 2026, limits vary by bank type, with caps of 20% or 25% on exposures to group entities, depending on global systemically important bank status. The changes aim to reduce concentration risk, align with global standards, and improve credit reporting through 10 new directions mandating more frequent and accurate data submissions to credit information companies.