The Reserve Bank of India (RBI) on June 16, 2026, notified the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026 to amend the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Directions, 2025.
The following has been stated:-
•The Reserve Bank of India has issued the Sixth Amendment Directions, 2026 to the Small Finance Banks – Prudential Norms on Capital Adequacy Directions, 2025.
•The amendment introduces a new provision granting a zero percent risk weight on exposures covered under ECLGS 5.0 to the extent of 75% of the guaranteed portion, where settlement is expected within 30 days of guarantee invocation. Any remaining exposure will continue to attract risk weights as per existing regulations.
•The change aligns capital treatment with the Government-backed credit guarantee scheme and provides regulatory capital relief to Small Finance Banks.
•The amendment is effective immediately.
The detailed notification is given in the document below.
[Notification No.: RBI/2026-27/137 DOR.STR.REC.116/21-01-002/2026-27]
