RBI Update - Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026

The Reserve Bank of India, through the Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026, has amended the Capital Adequacy Directions, 2025, to extend regulatory capital relief to exposures covered under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. A new Paragraph 29A has been inserted providing that exposures guaranteed under ECLGS 5.0 shall attract a zero percent risk weight to the extent of 75% of the guaranteed portion, representing the portion of the guarantee where the settlement amount is expected to be received within thirty days from the date of invocation. The remaining portion of the exposure shall continue to attract risk weight in accordance with the existing prudential norms. Issued under Section 45L of the Reserve Bank of India Act, 1934, the amendment aligns the capital treatment for All India Financial Institutions with the Government-backed ECLGS 5.0 framework and has come into force with immediate effect.