The Reserve Bank of India (RBI) has issued revised master directions on fraud risk management for regulated entities, including commercial banks, regional rural banks, cooperative banks, and All India Financial Institutions. The updated guidelines incorporate the Supreme Court's March 27, 2023 judgment, which mandates that lenders must provide natural justice to borrowers before declaring their accounts as fraud. This means that banks cannot unilaterally declare an account as fraud without giving the defaulter the right to be heard.