The Reserve Bank of India (RBI) issued the Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Second Amendment Directions, 2026, effective immediately, to modify the Master Direction – Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Directions, 2025, issued on November 28, 2025. These amendments revise the definition of Tier 1 capital for complying with credit/investment concentration norms for NBFCs. Specifically, paragraph 14 of the Master Direction is amended to include that the applicable Tier 1 Capital for compliance with norms stated in paragraphs 13 and 14 will be determined based on the NBFC's latest available financial statements (audited or subject to limited review). The term “Tier 1 Capital” shall be as defined in paragraph 10 of the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025. The directives are issued under Chapter III B of the Reserve Bank of India Act, 1934. Contact person: Sunil T S Nair, Chief General Manager. Date of issue: January 13, 2026, reference number RBI/2025-26/___ DOR.CAP.REC.No.XX/21.01.002/2025-26.
Key Entities Referenced
Reserve Bank of India: The central bank of India, the regulator issuing these directions.
Non-Banking Financial Companies (NBFCs): The entities to which the policy applies.
Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Directions, 2025: The primary policy document being amended.
Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025: Referenced policy document for the definition of Tier 1 Capital.
Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Second Amendment Directions, 2026: The current policy document issuing amendments to the main 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 Non-Banking Financial Companies (NBFCs)
Dear Sir / Madam,
Reserve Bank of India (Non-Banking Financial Companies - Concentration
Risk Management) Second Amendment Directions, 2026 – Draft for Comments
The Reserve Bank had issued the Master Direction – Reserve Bank of India (Non-
Banking Financial Companies - Concentration Risk Management) Directions, 2025
(hereinafter 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 review the definition
of Tier 1 capital being reckoned for complying with extant credit / investment
concentration norms for NBFCs.
2. Accordingly, in exercise of the powers conferred by Chapter III B of the Reserve
Bank of India Act, 1934, and all other provisions / laws enabling the Reserve Bank of
India (‘RBI’) in this regard, RBI being satisfied that it is necessary and expedient in
the public interest so to do, hereby, issues the following Amendment Directions.
3. Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk
Management) Second Amendment Directions, 2026.
4. These Amendment Directions shall come into force from immediate effect.
5. These Amendment Directions modify the Master Direction as under:
(1) The following paragraphs shall be inserted after paragraph 14(2):
“14(3) The applicable Tier 1 Capital for compliance with the norms stated in
paragraphs 13 and 14 above, shall be determined based on the NBFC’s latest
available financial statements (audited or subject to limited review).14(4) The term “Tier 1 Capital” in this context shall be as defined in paragraph
10 of the Reserve Bank of India (Non-Banking Financial Companies – Prudential
Norms on Capital Adequacy) Directions, 2025.”
Yours faithfully,
Sunil T S Nair
Chief General Manager
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