**Executive Summary**
This document, issued by the Reserve Bank of India on February 13, 2026, contains the Second Amendment Directions, 2026, regarding Financial Statements: Presentation and Disclosures for Small Finance Banks. It modifies the Reserve Bank of India (Small Finance Banks – Financial Statements Presentation and Disclosures) Directions, 2025. The amendments come into force from the date a bank decides to implement the provisions of the Reserve Bank of India (Small Finance Banks – Credit Facilities) Amendment Directions, 2026 or from April 1, 2026, whichever is earlier.
**Key Points / Main Content**
* **Amendment to Paragraph 10(5) - Exposures:**
* Sub-paragraph 10(5)(ii) shall be deleted.
* A new sub-paragraph (iia) shall be inserted regarding "Exposure to Capital Markets" with a table for reporting "Direct investment in equity and preference shares; convertible bonds; convertible debentures; units of non-debt mutual fund schemes", and "Advances to individuals for investment in shares (including IPOs/FPOs/ESOPs), convertible bonds, convertible debentures, and units of non-debt mutual fund schemes", amongst other specified items in both current and previous years, measured in crore.
* **Total Exposure to Capital Market Calculation:**
* The total capital market exposure reported in the table shall be computed in terms of Reserve Bank of India (Small Finance Banks - Concentration Risk Management) Directions, 2025 read with Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025.
**Impact Analysis**
**Small Finance Banks:**
* **Impact:** Small Finance Banks are required to comply with the new disclosure requirements for capital market exposures in their financial statements.
* **Action Required:** Banks must modify their financial reporting processes to reflect the changes outlined in the amendment directions and implement the new capital market exposure disclosure requirements. Also, banks need to decide when to implement the provisions of the Reserve Bank of India (Small Finance Banks – Credit Facilities) Amendment Directions, 2026, as that date determines the effective date of these amendments.
Key Entities Referenced
Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) – Second Amendment Directions, 2026: The primary subject of the document, providing amendments to the directions related to financial statement presentation and disclosures for Small Finance Banks.
Reserve Bank of India (Small Finance Banks – Financial Statements Presentation and Disclosures) Directions, 2025: Referenced document that is being amended by the current directions.
Reserve Bank of India (Small Finance Banks – Credit Facilities) Amendment Directions, 2026: Directions related to credit facilities for small finance banks, which prompted the review leading to the current amendments.
Banking Regulation Act, 1949: The Act under which the Reserve Bank of India derives its authority to issue these directions.
Reserve Bank of India (Small Finance Banks - Concentration Risk Management) Directions, 2025: Directions on concentration risk management in small finance banks, referenced for how capital market exposure should be calculated.
भारतीय �रज़वर् बैंक
_________________________ RESERVE BANK OF INDIA ______________________
www.rbi.org.in
RBI/2025-26/219
DOR.CRE.REC.410/21.04.018/2025-26 February 13, 2026
Reserve Bank of India (Small Finance Banks – Financial Statements:
Presentation and Disclosures) – Second Amendment Directions, 2026
Please refer to the Reserve Bank of India (Small Finance Banks - Financial
Statements Presentation and Disclosures) Directions, 2025 (hereinafter referred to
as ‘the Directions’).
2. On a review, consequent to the issuance of the Reserve Bank of India (Small
Finance Banks – Credit Facilities) Amendment Directions, 2026, and in exercise of
the powers conferred by the sections 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 the Directions as under:
3(1) In paragraph 10(5) titled ‘Exposures’ of ‘Chapter-III Disclosure in Financial
Statements – Notes to Accounts’ of the Directions, the following modifications
shall be effected:
3(1)(i) Sub-paragraph 10(5)(ii) shall be deleted.
3(1)(ii) After sub-paragraph 10(5)(ii), the following new sub- paragraph (iia) shall
be inserted:
(iia) Exposure to Capital Markets
(Amount in ₹ crore)
Sr. Particulars Current Previous
No. Year Year
(i) D irect investment in equity and preference shares;
convertible bonds; convertible debentures; units of
िविनयमन िवभाग, केंद्रीय कायार्लय, केंद्रीय कायार्लय भवन, 12वी/ं 13वी ंमंिज़ल, शहीद भगत िसंह मागर्, फोटर्, मुंबई - 400001
टेलीफोन/ Tel No: 22661602, 22601000 फै�/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
�हदं ी आसान ह,� इसका �योग बड़ाइएSr. Particulars Current Previous
No. Year Year
non-debt mutual fund schemes; units of REITs and
InvITs and units of Alternative Investment Funds (AIFs)
(ii) A dvances to individuals for investment in shares
(including IPOs/FPOs/ESOPs), convertible bonds,
convertible debentures, and units of non-debt mutual
fund schemes
(iii) A dvances for any other purposes where shares or
convertible bonds or convertible debentures or units of
non-debt mutual fund schemes are taken as primary
security
(iv) A dvances for any other purposes to the extent secured
by collateral of shares, convertible bonds, convertible
debentures or units of non-debt mutual fund schemes.
where the advances are extended on the principal
strength of such collateral
(v) A ll credit facilities to Capital Market Intermediaries
(CMIs)
(vi) F inancing to non-debt mutual fund schemes
(vii) L oans sanctioned by a bank for financing the
acquisition of the promoters’ shares in an existing
company, engaged in implementing or operating an
infrastructure project in India
(viii) U nderwriting commitments taken up by the banks in
respect of primary issue of shares or convertible bonds
or convertible debentures or units of non-debt mutual
fund schemes
(ix) Ir revocable Payment Commitments issued by
custodian banks on behalf of its clients in favour of
clearing corporations of stock exchanges
(x) T rade exposures of a bank, which is acting as a
clearing member in equity derivative and commodity
derivative transactions, to its client, including funded
initial margins placed on behalf of clients, where
permissible
Total exposure to capital market
Note: The capital market exposure reported in the table above shall be
computed in terms of Reserve Bank of India (Small Finance Banks -
Concentration Risk Management) Directions, 2025 read with Reserve Bank of
India (Small Finance Banks – Credit Facilities) Directions, 2025.4. The above amendments shall come into force from the date a bank decides to
implement the provisions of the Reserve Bank of India (Small Finance Banks – Credit
Facilities) Amendment Directions, 2026 or from April 1, 2026, whichever is earlier.
Vaibhav Chaturvedi
(Chief General Manager)