**Executive Summary**
This document contains the Reserve Bank of India's (RBI) Amendment Directions, 2026, concerning Core Investment Companies (CICs). It serves to modify the "Master Direction" issued on November 28, 2025, by clarifying the computation of Owned Funds. These directions are effective immediately, as of January 13, 2026, and are released for public comment.
**Key Points / Main Content**
* **Title and Scope:** The directions are called the "Reserve Bank of India (Core Investment Companies) Amendment Directions, 2026" and they amend the existing "Master Direction".
* **Effective Date:** These amendment directions come into force with immediate effect.
* **Amendment to Paragraph 11(21):** Paragraph 11(21) of the Master Direction, defining "owned funds," is replaced with a new definition.
* **Revised Definition of "Owned Funds":**
* Includes paid-up equity capital, preference shares compulsorily convertible into equity, free reserves (including quarterly profits), balances in share premium accounts, and capital reserves from the sale of assets.
* Excludes reserves created by revaluation of assets.
* Reduced by accumulated loss balance, book value of intangible assets, and deferred revenue expenditure.
* **Conditions for Inclusion of Quarterly Profits:**
* Financial statements must be subjected to limited review on a quarterly basis by statutory auditors.
* Such profit is reduced by the average dividend paid in the last three years and the amount which can be reckoned for inclusion would be arrived at as : EPt = NPt - 0.25 *D*t,
* Losses in the current year must be fully deducted from Owned Fund.
* **Right-of-Use (ROU) Asset Treatment:** Core Investment Companies (CICs) shall not be required to deduct a Right-of-Use (ROU) asset (created in terms of Ind AS 116-Leases) from Owned Fund, provided the underlying asset being taken on lease is a tangible asset.
**Impact Analysis**
**Stakeholder:** All Core Investment Companies (CICs)
* **Impact:** The CICs need to comply with the revised definition of "owned funds" when calculating their capital adequacy and financial positions. This specifically impacts how they account for quarterly profits, dividends, and certain assets.
* **Action Required:** CICs must update their accounting practices and financial reporting to align with the amended directions. They also need to ensure that their financial statements are reviewed quarterly by statutory auditors.
Key Entities Referenced
Reserve Bank of India (Core Investment Companies) Amendment Directions, 2026: The main subject of the document, outlining amendments to regulations for Core Investment Companies.
Reserve Bank of India (Core Investment Companies) Directions, 2025: The 'Master Direction' being amended by the current document.
Reserve Bank of India Act, 1934: The act that empowers the Reserve Bank of India to issue these directions.
Reserve Bank of India: The regulator issuing the amendment directions.
भारतीय ररजर्व बैंक
_________________________RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2025-26/___
DOR.CAP.REC.No.XX/21.01.002/2025-26 January 13, 2026
All Core Investment Companies (CICs)
Dear Sir / Madam,
Reserve Bank of India (Core Investment Companies) Amendment Directions,
2026 – Draft for Comments
The Reserve Bank had issued the Reserve Bank of India (Core Investment
Companies) Directions, 2025 (hereafter referred as the ‘Master Direction’), on
November 28, 2025, as amended from time to time. There is a need to further
amend the same to provide clarification on the components reckoned in the
computation of Owned Fund.
2. Accordingly, in exercise of the powers conferred by sections 45JA, 45L and 45M
of the Reserve Bank of India Act, 1934 (2 of 1934), and of all the powers enabling it
in this behalf, the Reserve Bank having considered that it is necessary and
expedient in the public interest and being satisfied that for the purpose of enabling it
to regulate the credit system to the advantage of the country so to do, hereby, issues
the following Amendment Directions.
3. These Directions shall be called the Reserve Bank of India (Core Investment
Companies) Amendment Directions, 2026.
4. These Amendment Directions shall come into force with immediate effect.
5. These Amendment Directions modify the Master Direction as under:
Paragraph 11(21) shall be replaced by:
“11(21) “owned funds” means paid up equity capital, preference shares which
are compulsorily convertible into equity, free reserves including quarterly
profits, balance in share premium account and capital reserves representing
surplus arising out of sale proceeds of asset, excluding reserves created byrevaluation of asset, as reduced by accumulated loss balance, book value of
intangible assets and deferred revenue expenditure, if any;
Inclusion of quarterly profits shall be subject to the following conditions:
(a) The financial statements shall be subjected to limited review on a
quarterly basis by the statutory auditors.
(b) Such profits shall be reduced by average dividend paid in the last three
years and the amount which can be reckoned for inclusion would be
arrived at as under:
EP = NP - 0.25 *D*t
t t
Where:
EP = Eligible profit up to quarter ‘t’ of the current financial year, t varies
t
from 1 to 4
NP = Net profit up to quarter ‘t’
t
D = average dividend paid during the last three years
Losses in the current year shall be fully deducted from Owned Fund.
CICs shall not be required to deduct a Right-of-Use (ROU) asset (created in terms of
Ind AS 116-Leases) from Owned Fund, provided the underlying asset being taken on
lease is a tangible asset.”
Yours faithfully,
Sunil T S Nair
Chief General Manager
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