diff --git a/bench/commands/update.py b/bench/commands/update.py
index f87cda95..82f857ba 100755
--- a/bench/commands/update.py
+++ b/bench/commands/update.py
@@ -5,7 +5,7 @@ from bench.config.common_site_config import get_config, update_config
 from bench.app import pull_all_apps, is_version_upgrade, validate_branch
 from bench.utils import (update_bench, validate_upgrade, pre_upgrade, post_upgrade, before_update,
 	update_requirements, update_node_packages, backup_all_sites, patch_sites, build_assets,
-	restart_supervisor_processes, restart_systemd_processes)
+	restart_supervisor_processes, restart_systemd_processes, is_bench_directory)
 from bench import patches
 from six.moves import reload_module
 
@@ -25,6 +25,11 @@ from six.moves import reload_module
 def update(pull=False, patch=False, build=False, bench=False, auto=False, restart_supervisor=False, restart_systemd=False, requirements=False, no_backup=False, force=False, reset=False):
 	"Update bench"
 
+	if not is_bench_directory():
+		"""Update only bench if bench update called from outside a bench"""
+		update_bench(bench_repo=True, requirements=True)
+		sys.exit()
+
 	if not (pull or patch or build or bench or requirements):
 		pull, patch, build, bench, requirements = True, True, True, True, True
 
@@ -35,7 +40,7 @@ def update(pull=False, patch=False, build=False, bench=False, auto=False, restar
 	conf = get_config(".")
 
 	if bench and conf.get('update_bench_on_update'):
-		update_bench()
+		update_bench(bench_repo=True, requirements=False)
 		restart_update({
 				'pull': pull,
 				'patch': patch,
diff --git a/bench/utils.py b/bench/utils.py
index 8e3dfd0b..ab75dad0 100755
--- a/bench/utils.py
+++ b/bench/utils.py
@@ -16,6 +16,18 @@ logger = logging.getLogger(__name__)
 
 folders_in_bench = ('apps', 'sites', 'config', 'logs', 'config/pids')
 
+
+def is_bench_directory():
+	cur_dir = os.path.curdir
+	is_bench = True
+
+	for folder in folders_in_bench:
+		path = os.path.join(cur_dir, folder)
+		is_bench = is_bench and os.path.exists(path)
+
+	return is_bench
+
+
 def safe_decode(string, encoding = 'utf-8'):
 	try:
 		string = string.decode(encoding)
@@ -256,13 +268,23 @@ def read_crontab():
 	s.stdout.close()
 	return out
 
-def update_bench():
-	logger.info('updating bench')
+def update_bench(bench_repo=True, requirements=True):
+	logger.info("Updating bench")
 
 	# bench-repo folder
 	cwd = os.path.dirname(os.path.dirname(os.path.abspath(__file__)))
 
-	exec_cmd("git pull", cwd=cwd)
+	if bench_repo:
+		try:
+			exec_cmd("git pull", cwd=cwd)
+		except bench.utils.CommandFailedError:
+			exec_cmd("git stash", cwd=cwd)
+			logger.info("Stashing changes made at {}\nUse git stash apply to recover changes after the successful update!".format(cwd))
+
+	if requirements:
+		update_bench_requirements()
+
+	logger.info("Bench Updated!")
 
 def setup_sudoers(user):
 	if not os.path.exists('/etc/sudoers.d'):
@@ -424,19 +446,24 @@ def set_default_site(site, bench_path='.'):
 	exec_cmd("{frappe} --use {site}".format(frappe=get_frappe(bench_path=bench_path), site=site),
 			cwd=os.path.join(bench_path, 'sites'))
 
-def update_requirements(bench_path='.'):
-	print('Updating Python libraries...')
-
-	# update env pip
-	env_pip = os.path.join(bench_path, 'env', 'bin', 'pip')
-	exec_cmd("{pip} install -q -U pip".format(pip=env_pip))
-
-	# Update bench requirements (at user level)
+def update_bench_requirements():
 	bench_req_file = os.path.join(os.path.dirname(bench.__path__[0]), 'requirements.txt')
 	user_pip = which("pip" if PY2 else "pip3")
 	install_requirements(user_pip, bench_req_file, user=True)
 
+def update_env_pip(bench_path):
+	env_pip = os.path.join(bench_path, 'env', 'bin', 'pip')
+	exec_cmd("{pip} install -q -U pip".format(pip=env_pip))
+
+def update_requirements(bench_path='.'):
 	from bench.app import get_apps, install_app
+	print('Updating Python libraries...')
+
+	# update env pip
+	update_env_pip(bench_path)
+
+	# Update bench requirements (at user level)
+	update_bench_requirements()
 
 	for app in get_apps():
 		install_app(app, bench_path=bench_path)