**Executive Summary**
This document, issued by the Reserve Bank of India on February 13, 2026, presents the Second Amendment Directions, 2026, to the Prudential Norms on Capital Adequacy for Commercial Banks. These amendments modify paragraph 84(6) of the Directions concerning risk-weighted assets (RWAs). Banks must implement these changes by April 1, 2026, or earlier, depending on when they implement the provisions of the Credit Facilities Amendment Directions, 2026.
**Key Points / Main Content**
* **Purpose**: The document issues Amendment Directions to modify existing regulations based on a review following the issuance of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026.
* **Legal Basis**: These directions are issued under the powers conferred by sections 21 and 35A of the Banking Regulation Act, 1949.
* **Amendment to Risk-Weighted Assets (RWAs)**:
* Modifies paragraph 84(6) in 'Chapter IV - Risk weighted assets (RWAs)' of the Directions.
* Addresses the issue of irrevocable payment commitments by a bank to clearing corporations of stock exchanges.
* Specifies that while such commitments are financial guarantees with a 100% credit conversion factor (CCF), capital must be maintained only on the exposure reckoned as capital market exposure (CME).
* Capital must be maintained on the amount taken for CME, and the risk weight is set at 125%.
* **Effective Date**: The amendment comes into force when a bank implements the provisions of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026, or from April 1, 2026, whichever is earlier.
**Impact Analysis**
**Commercial Banks**
* **Impact**
* Commercial banks must comply with the revised norms for capital adequacy regarding financial guarantees to clearing corporations of stock exchanges.
* These norms affect how banks calculate and maintain capital for CME.
* **Action Required**
* Implement the provisions of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026, to trigger the enforcement of these new directions, or be compliant by April 1, 2026, whichever is earlier.
* Adjust their capital maintenance calculations to reflect the new risk weight and capital requirements for CME.
Key Entities Referenced
Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026: Amendment Directions issued by RBI regarding credit facilities for commercial banks.
Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025: RBI directions on prudential norms on capital adequacy for commercial banks.
Reserve Bank of India (Commercial Banks - Concentration Risk Management) Directions, 2025: RBI directions on concentration risk management for commercial banks.
Banking Regulation Act, 1949: Indian law that regulates the banking sector, providing the legal basis for RBI's regulatory actions.
Reserve Bank of India: The central bank of India, responsible for regulating the banking sector.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
_________________________ ______________________
www.rbi.org.in
RBI/2025-26/213
DOR.CRE.REC.404/21-01-002/2025-26 February 13, 2026
Reserve Bank of India (Commercial Banks - Prudential Norms on Capital
Adequacy) Second Amendment Directions, 2026
Please refer to Reserve Bank of India (Commercial Banks - Prudential Norms on
Capital Adequacy) Directions, 2025 (hereinafter referred to as ‘the Directions’).
2. On a review, consequent to the issuance of the Reserve Bank of India
(Commercial Banks – Credit Facilities) Amendment Directions, 2026, and in exercise
of the powers conferred by the section 21 and 35A of the Banking Regulation Act,
1949 and all other laws enabling the Reserve Bank of India (hereinafter called the
Reserve Bank) in this regard, the Reserve Bank being satisfied that it is necessary
and expedient in the public interest so to do, hereby issues the Amendment Directions
hereinafter specified.
3. The Amendment Directions modify paragraph 84(6) in ‘Chapter IV - Risk
weighted assets (RWAs)’ of the Directions as under:
“Issue of irrevocable payment commitment by a bank to clearing corporations
of stock exchanges on behalf of its client is a financial guarantee with a CCF of
100 per cent. However, capital shall be maintained only on the exposure
reckoned as capital market exposure (CME) in terms of the Reserve Bank of
India (Commercial Banks - Concentration Risk Management) Directions, 2025.
Thus, capital is to be maintained on the amount taken for CME and the risk
weight shall be 125 per cent thereon.”
4. The above amendment shall come into force from the date a bank decides to
implement the provisions of the Reserve Bank of India (Commercial Banks – Credit
Facilities) Amendment Directions, 2026 or from April 1, 2026, whichever is earlier.
(Vaibhav Chaturvedi)
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