**Executive Summary**
The Reserve Bank of India (RBI) has issued draft amendment directions for comments concerning Standalone Primary Dealers (SPDs). Dated January 13, 2026, these directions aim to clarify the components and review the definition of Tier 1 capital for SPDs. These directions come into force with immediate effect.
**Key Points / Main Content**
* **Amendment Directions Overview:**
* These are the Reserve Bank of India (Standalone Primary Dealers) Amendment Directions, 2026.
* They amend the "Reserve Bank of India (Standalone Primary Dealers) Directions, 2025," referred to as the 'Master Direction.'
* The directions are issued under the powers conferred by Sections 45JA, 45K, 45L and 45M of the Reserve Bank of India Act, 1934.
* These directions come into force with immediate effect.
* **Amendment to Paragraph 9(6):**
* Tier 1 capital now includes paid-up capital, statutory reserves, other disclosed free reserves, and quarterly profits.
* Inclusion of quarterly profits is subject to:
* Financial statements being subjected to limited review on a quarterly basis by statutory auditors.
* Profits being reduced by average dividend paid in the last three years (formula provided).
* Losses in the current year are fully deducted from Tier 1 capital.
* Investment in subsidiaries, intangible assets, losses in current accounting period, deferred tax asset and losses brought forward from previous accounting periods shall be deducted from Tier 1 capital.
* **Insertion of Paragraphs 159(7) and 159(8):**
* Paragraph 159(7) states that the applicable Tier 1 Capital for compliance with the norms stated in sub-paragraphs 159(1) to 159(6) above, shall be determined based on the SPD's latest available financial statements (audited or subject to limited review).
* Paragraph 159(8) defines "Tier 1 Capital" in this context as defined in paragraph 9(6) of the Master Directions.
**Impact Analysis**
**Standalone Primary Dealers (SPDs)**
* **Impact:** SPDs are impacted by changes to the calculation and definition of Tier 1 capital, which affects compliance with exposure norms.
* **Action Required:** SPDs need to review the new directions, adjust their Tier 1 capital computation methods, and ensure financial statements are appropriately reviewed. They should also provide feedback on the draft directions.
Key Entities Referenced
Reserve Bank of India (Standalone Primary Dealers) Amendment Directions, 2026: Amendment directions issued by the Reserve Bank of India concerning standalone primary dealers.
Reserve Bank of India (Standalone Primary Dealers) Directions, 2025: The ‘Master Direction' which is being amended by the current directions.
Reserve Bank of India Act, 1934: The act that provides the legal basis for the powers exercised in issuing these directions, specifically sections 45JA, 45K, 45L and 45M.
Standalone Primary Dealers (SPDs): The entities directly subject to the requirements and regulations in the amendment directions.
Reserve Bank of India: The issuing authority of the 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 Standalone Primary Dealers (SPDs)
Dear Sir / Madam,
Reserve Bank of India (Standalone Primary Dealers) Amendment Directions,
2026 – Draft for Comments
The Reserve Bank had issued the Reserve Bank of India (Standalone Primary
Dealers) Directions, 2025 (hereafter 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 provide clarification on the components reckoned in the computation of Tier 1
capital, as well as to review the definition of Tier 1 capital being reckoned for
complying with extant exposure norms.
2. Accordingly, In exercise of the powers conferred under Section 45JA, 45K, 45L
and 45M of the Reserve Bank of India Act, 1934 (2 of 1934), and of all powers
enabling it in this behalf, the Reserve Bank, having considered it necessary in the
public interest, and being satisfied that, for the purpose of enabling it to regulate the
financial system to the advantage of the country so to do, and to prevent the affairs
of any Standalone Primary Dealer (SPD) from being conducted in a manner
detrimental to the interest of investors or in any manner prejudicial to the interest of
such SPD, hereby, issues the following Amendment Directions.
3. These Directions shall be called the Reserve Bank of India (Standalone Primary
Dealers) Amendment Directions, 2026.
4. These Amendment Directions shall come into force with immediate effect.
5. These Amendment Directions modify the Master Direction as under:
(1) Paragraph 9(6) shall be replaced by:“9(6) Tier 1 capital means paid-up capital, statutory reserves and other disclosed
free reserves including quarterly profits.
Inclusion of quarterly profits shall be subject to the following conditions:
(i) The financial statements shall be subjected to limited review on a quarterly
basis by the statutory auditors.
(ii) Such profits shall be reduced by average dividend paid in the last three years
and the amount which can be reckoned for inclusion would be arrived at as
under:
EP = NP - 0.25 *D*t
t t
Where:
EP = Eligible profit up to quarter ‘t’ of the current financial year, t varies from 1
t
to 4
NP = Net profit up to quarter ‘t’
t
D = average dividend paid during the last three years
Losses in the current year shall be fully deducted from Tier 1 capital.
Investment in subsidiaries (where applicable), intangible assets, losses in current
accounting period, deferred tax asset and losses brought forward from previous
accounting periods shall be deducted from the Tier 1 capital.”
(2) The following paragraphs shall be inserted after paragraph 159(6):
“159(7) The applicable Tier 1 Capital for compliance with the norms stated in sub-
paragraphs 159(1) to 159(6) above, shall be determined based on the SPD’s latest
available financial statements (audited or subject to limited review).
159(8) In this context, the term “Tier 1 Capital” shall be as defined in paragraph 9(6)
of the Master Directions.”
Yours faithfully,
Sunil T S Nair
Chief General Manager
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