**Executive Summary**
This document, issued by the Reserve Bank of India on January 9, 2026, contains Amendment Directions to the "Reserve Bank of India (Small Finance Banks - Prudential Norms on Capital Adequacy) Directions, 2025". These amendments modify the risk weighting of claims on non-resident corporates based on ratings assigned by international rating agencies. The amendment comes into effect immediately.
**Key Points / Main Content**
* **Amendment Scope:** Modifies the risk weighting of claims on non-resident corporates as per ratings assigned by international rating agencies.
* **Risk Weighting based on International Rating Agencies (S&P/Fitch/Moody's Ratings):**
* The claims on non-resident corporates shall be risk weighted as under as per the ratings assigned by international rating agencies.
* Mapping of risk weights for claims on non-resident corporates based on ratings by S&P/Fitch/Moody's Ratings:
| S&P / Fitch Ratings | AAA to AA | A | BBB to BB | Below BB | Unrated |
| :------------------ | :-------- | :-- | :-------- | :------- | :------ |
| Moody's ratings | Aaa to Aa | A | Baa to Ba | Below Ba | Unrated |
| Risk Weight (%) | 20 | 50 | 100 | 150 | 100 |
* **Risk Weighting based on CareEdge Global IFSC Limited Ratings (Claims Originating at IFSC):**
* For claims originating at International Financial Services Centre (IFSC) rated by M/s CareEdge Global IFSC Limited, the risk weighting is mapped as follows:
| CareEdge Global IFSC Limited | AAA | AA | A | BBB | BB & below |
| :---------------------------- | :-: | :-: | :-: | :-: | :--------- |
| Risk Weight (%) | 20 | 30 | 50 | 100 | 150 |
* **Explanation for Risk Weighting:**
* Unrated claims having aggregate exposure from the banking system of more than ₹200 crore attract a risk weight of 150%.
* Claims with aggregate exposure from the banking system of more than ₹100 crore, which were previously rated and subsequently became unrated, attract a risk weight of 150%.
* No claim on an unrated corporate shall be given a risk weight preferential to that assigned to its sovereign of incorporation.
* **Use of International Credit Rating Agencies:** A bank may use the ratings of international credit rating agencies for risk weighting its claims for capital adequacy purposes where specified. These agencies (arranged in alphabetical order) include CareEdge Global IFSC Limited (for all non-resident corporate exposures originating in IFSC), Fitch, Moody's, and Standard & Poor's.
* **Effective Date:** The above amendment shall come into force with immediate effect.
**Impact Analysis**
**Small Finance Banks (SFBs)**
* **Impact:** SFBs will need to update their risk weighting calculations for claims on non-resident corporates based on the revised guidelines and rating assignments.
* **Action Required:** SFBs must immediately implement the amended directions for risk weighting claims on non-resident corporates in line with the ratings assigned by international rating agencies (S&P/Fitch/Moody's) and CareEdge Global IFSC Limited for claims originating at IFSC. This includes adjusting capital adequacy calculations accordingly.
Key Entities Referenced
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Amendment Directions, 2026: The primary subject of the document, providing updated guidelines for Small Finance Banks.
Banking Regulation Act, 1949: The legal basis for the Reserve Bank of India's authority to issue the amendment directions.
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025: The original policy document being amended by this notice.
CareEdge Global IFSC Limited: A rating agency whose ratings are relevant for determining risk weights of claims on non-resident corporates originating at International Financial Services Centre (IFSC).
International Financial Services Centre (IFSC): A financial hub where claims originating from non-resident corporates are subject to specific risk weight mapping as defined by the document.
भारतीय ररज़र्व बैंक
RESERVE BANK OF INDIA
_________________________ ______________________
www.rbi.org.in
RBI/2025-26/190
DOR.STR.REC.391/21-01-002/2025-26 January 09, 2026
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital
Adequacy) Amendment Directions, 2026
Please refer to Reserve Bank of India (Small Finance Banks- Prudential Norms on
Capital Adequacy) Directions, 2025 (hereinafter referred to as ‘the Directions’).
2. On a review, and in exercise of the powers conferred by the section 35A of the
Banking Regulation Act, 1949 and all other laws enabling 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 modifies the Directions as under:
(1) Para 39 shall be substituted by the following:
“39. The claims on non-resident corporates shall be risk weighted as under as per the
ratings assigned by international rating agencies. Further, with regard to claims on all
non-resident corporates originating at International Financial Services Centre (IFSC)
for which ratings are assigned by M/s CareEdge Global IFSC Limited, the mapping
shall be as per Table 8.2 below.
Table 8.1: Claims on non-resident corporates - risk weight mapping for
the ratings assigned by S&P/Fitch/Moody’s Ratings
S&P / Fitch
AAA to AA A BBB to BB Below BB Unrated
Ratings
Moody’s ratings Aaa to Aa A Baa to Ba Below Ba Unrated
Risk Weight (%) 20 50 100 150 100
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 बड़ाइएTable 8.2: Claims on non-resident corporates - risk weights mapping for the
ratings assigned by M/s CareEdge Global IFSC Limited - for claims originating
at International Financial Services Centre (IFSC)
CareEdge
BB &
Global IFSC AAA AA A BBB
below
Limited
Risk Weight (%) 20 30 50 100 150
Explanation –
(i) Unrated claims having aggregate exposure from banking system of more
than ₹200 crore shall attract a risk weight of 150 per cent.
(ii) Claims with aggregate exposure from banking system of more than ₹100
crore which were rated earlier and subsequently have become unrated shall
attract a risk weight of 150 per cent.
(iii) No claim on an unrated corporate shall be given a risk weight preferential
to that assigned to its sovereign of incorporation.”
(2) Para 118 shall be substituted by the following:
“118. A bank may also use the ratings of the following international credit rating
agencies (arranged in alphabetical order) for the purposes of risk weighting its claims
for capital adequacy purposes where specified:
(i) CareEdge Global IFSC Limited (for all non-resident corporate exposures
originating in IFSC);
(ii) Fitch;
(iii) Moody's; and
(iv) Standard & Poor’s.”
4. The above amendment shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
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