Mumbai, April 29 -- The Reserve Bank of India has allowed banks and non-bank lenders to restructure loans of borrowers hit by natural calamities without waiting for their requests, a move that gives lenders greater flexibility but comes with a 5% provisioning requirement.

The central bank on Wednesday issued final guidelines for resolution of exposures in disaster-hit areas, shifting to a principle-based framework that gives lenders discretion in designing and implementing resolution plans.

The revised rules will come into effect from 1 July 2026 and will apply prospectively, with existing restructured accounts continuing under the current framework unless a fresh plan is invoked. The RBI had issued draft directions on 27 January and so...