**Executive Summary**
This document, issued by the Reserve Bank of India (RBI) on February 13, 2026, provides the Second Amendment Directions, 2026 to the Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) Directions, 2025. These amendment directions modify disclosure requirements for Small Finance Banks, specifically related to "Exposures" in Chapter-III Disclosure of Financial Statements. 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) is deleted.
* New sub-paragraph (iia) regarding "Exposure to Capital Markets" is inserted.
* **New Sub-Paragraph (iia): Exposure to Capital Markets**
* A table is introduced requiring the disclosure of exposure to capital markets. The table provides a format to report the current year and previous year amounts (in ₹ crore) for the following:
* Direct investment in equity and preference shares, convertible bonds, convertible debentures, units of non-debt mutual fund schemes.
* Non-debt mutual fund schemes; units of REITs and InvITs and units of Alternative Investment Funds (AIFs).
* Advances to individuals for investment in shares (including IPOs/FPOs/ESOPs), convertible bonds, convertible debentures, and units of non-debt mutual fund schemes.
* Advances 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.
* Advances 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.
* All credit facilities to Capital Market Intermediaries (CMIs).
* Financing to non-debt mutual fund schemes.
* Loans 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.
* Underwriting 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.
* Irrevocable Payment Commitments issued by custodian banks on behalf of its clients in favour of clearing corporations of stock exchanges.
* Trade 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.
* The total exposure to the capital market shall be reported.
* **Note on Computation:**
* The 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.
* **Effective Date:**
* The 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.
**Impact Analysis**
**Stakeholder: Small Finance Banks**
* **Impact:** Small Finance Banks must modify their financial statement presentations and disclosures to comply with the new amendment directions, particularly regarding capital market exposure reporting.
* **Action Required:** Implement the amendments and ensure that the required disclosures are accurately prepared and reported in the format specified in the new sub-paragraph (iia). The amendments need to be implemented no later than April 1, 2026.
Key Entities Referenced
Reserve Bank of India: India's central bank and regulatory body responsible for overseeing the financial system.
Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) – Second Amendment Directions, 2026: Second Amendment Directions, 2026 concerning the financial statements of Small Finance Banks.
Banking Regulation Act, 1949: An act to consolidate and amend the law relating to banking companies.
Reserve Bank of India (Small Finance Banks – Financial Statements Presentation and Disclosures) Directions, 2025: The directions of Reserve bank of India concerning the presentation and disclosures of financial statements of Small Finance Banks.
Reserve Bank of India (Small Finance Banks – Credit Facilities) Amendment Directions, 2026: The amendment directions of Reserve bank of India concerning the credit facilities of Small Finance Banks.
भारतीय ररज़र्व 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(2) 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
विवियमि विभाग, केंद्रीय कायाालय, केंद्रीय कायाालय भिि, 12िी/ीं 13िी ींमींव़िल, शहीद भगत व ींह मागा, फोर्ा, म ींबई - 400001
र्ेलीफोि/ Tel No: 22661602, 22601000 फैक्स/ Fax No: 022-2270 5691
Department of Regulation, Central Office, Central Office Building, 12th/ 13th Floor, Shahid Bhagat Singh Marg, Fort, Mumbai – 400001
हहदिं ी आसान ह,ैं इसका प्रयोग 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)