The Reserve Bank of India (RBI) has introduced new guidelines for restructuring loans of borrowers affected by natural disasters, effective from July 1, 2026. This allows banks and non-banking financial companies (NBFCs) to restructure loans without waiting for borrower requests, providing greater flexibility in relief measures. Under the revised framework, lenders must invoke resolution plans within 45 days of a calamity declaration and implement them within 90 days. Importantly, a 5% provisioning requirement on outstanding debt is mandated to manage the heightened risk associated with these accounts. Borrowers will have a 135-day opt-out window from the calamity declaration date, and banks can consider insurance payouts when restructuring loans. However, the RBI has maintained strict eligibility criteria, allowing restructuring only for 'standard' accounts that are not overdue by more than 30 days at the time of the disaster. This decision aims to support borrowers impacted by external shocks rather than those already in financial distress.