**Executive Summary**
This document contains the Reserve Bank of India's (RBI) Amendment Directions, 2026, modifying the "Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025". These directions specify changes to the risk weighting of claims on non-resident corporates based on ratings assigned by international rating agencies and CareEdge Global IFSC Limited. The amendment comes into effect immediately, as of January 9, 2026.
**Key Points / Main Content**
* **Amendment Overview:**
* Modifies the existing "Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025".
* **Risk Weighting for Non-Resident Corporates:**
* Claims on non-resident corporates shall be risk-weighted as per international rating agency ratings.
* For claims originating at International Financial Services Centre (IFSC) rated by M/s CareEdge Global IFSC Limited, a specific mapping will apply.
* **Table 8.1: Claims on non-resident corporates - risk weight mapping for the ratings assigned by S&P/Fitch/Moody's Ratings:**
* Details risk weights for S&P, Fitch, and Moody's ratings ranging from AAA to AA (20% risk weight) to Unrated (100% risk weight).
* Risk weights increase as the rating decreases.
* **Table 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)**
* Details risk weights for CareEdge Global IFSC Limited ratings ranging from AAA (20% risk weight) to BB & below (150% risk weight).
* Risk weights increase as the rating decreases.
* **Explanation for Table 8.2**
* Unrated claims having aggregate exposure from banking system of more than 200 crore shall attract a risk weight of 150 per cent.
* 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.
* No claim on an unrated corporate shall be given a risk weight preferential to that assigned to its sovereign of incorporation.
* **Credit Rating Agencies for Risk Weighting**
* Banks can use ratings from CareEdge Global IFSC Limited (for non-resident exposures originating in IFSC), Fitch, Moody's, and Standard & Poor's for risk weighting claims.
* **Effective Date:**
* The amendment comes into force with immediate effect.
**Impact Analysis**
**Small Finance Banks**
* **Impact:** SFBs need to adjust their risk assessment and capital adequacy calculations for non-resident corporate claims based on the updated risk weights.
* **Action Required:** Implement the new risk weighting framework as outlined in the Amendment Directions.
Key Entities Referenced
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Amendment Directions, 2026: The primary subject of the document, these directions amend existing regulations related to capital adequacy for Small Finance Banks in India.
Reserve Bank of India (Small Finance Banks- Prudential Norms on Capital Adequacy) Directions, 2025: The original Directions being amended by this document.
Banking Regulation Act, 1949: The Act that empowers the Reserve Bank of India to issue the amendment directions.
International Financial Services Centre (IFSC): A key location that determines the applicability of certain provisions in the amendment, especially regarding ratings assigned by CareEdge Global IFSC Limited.
CareEdge Global IFSC Limited: A credit rating agency whose ratings are used for risk weighting claims on non-resident corporates originating in IFSC.
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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