The Reserve Bank of India (RBI) on May 08, 2026, issued the Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026 to further amend the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025.
These Amendment Directions modify the Master Direction as under:
Paragraph 12(x) shall be replaced by:
“(x) A bank may reckon the profits in current financial year for CRAR calculation on a quarterly basis subject to the following conditions:
(a) The financial statements shall be audited or subjected to limited review on a quarterly basis; and
(b) The amount which can be reckoned shall be arrived at by using the following formula:
EPt = NPt - 0.25 *D*t
Where:
EPt = Eligible profit up to quarter ‘t’ of the current financial year, t varies from 1 to 4
NPt = Net profit up to quarter ‘t’
D = average dividend paid during the last three financial years
The cumulative net loss up to the quarter end shall be fully deducted while calculating CET1 capital for the relevant quarter;”
These Directions shall come into force with immediate effect.
[Notification No. RBI/2026-27/79 DOR.CAP.REC.No.68/21.01.002/2026-27]
