RBI Issues Amendment Directions on ‘Review of guidelines on inclusion of quarterly profits to Common Equity Tier 1 (CET1) capital for computation of Capital to Risk weighted Assets Ratio (CRAR) for Banks’

Reserve Bank had, on April 08, 2026, issued three draft Amendment Directions on ‘Review of guidelines on inclusion of quarterly profits to Common Equity Tier 1 (CET1) capital for computation of Capital to Risk weighted Assets Ratio (CRAR) for Banks’ seeking feedback from stakeholders. Currently, Commercial Banks (excluding Local Area Banks and Regional Rural Banks) may reckon the profits in current financial year for CRAR calculation on a quarterly basis provided the incremental provisions made for non-performing assets (NPAs) at the end of the any of the four quarters of the previous financial year have not deviated more than 25 per cent from the average of the four quarters. The Draft Directions were aimed to remove the qualifying condition of incremental provisions for NPAs.

Feedback received on the drafts have been examined and considered while finalizing the Amendment Directions. A statement on the feedback received on the drafts is provided in the Annex.

Accordingly, Reserve Bank of India has released today the following three Amendment Directions on ‘Review of guidelines on inclusion of quarterly profits to Common Equity Tier 1 (CET1) capital for computation of Capital to Risk weighted Assets Ratio (CRAR) for Banks’:

1. Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026.

2. Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Fourth Amendment Directions, 2026.

3. Reserve Bank of India (Payments Banks – Prudential Norms on Capital Adequacy) Second Amendment Directions, 2026.

(Brij Raj)           
Chief General Manager

Press Release: 2026-2027/227