The Reserve Bank of India (RBI) on June 16, 2026, issued the Reserve Bank of India (Regional Rural Banks – Prudential Norms on Capital Adequacy) Second Amendment Directions, 2026, amending the existing 2025 Directions to provide capital relief for exposures covered under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. The amendment follows the launch of ECLGS 5.0 by the Government of India and the related operational circular issued by the National Credit Guarantee Trustee Company (NCGTC) on May 8, 2026.
Under the amendment, a new Paragraph 15(5)A has been inserted in the Directions, providing that exposures guaranteed under ECLGS 5.0 shall attract a zero percent risk weight to the extent of 75% of the guaranteed portion. This benefit is available for the portion of the guarantee where the settlement amount is expected to be received within 30 days from the date of guarantee invocation. The balance exposure that does not qualify for this treatment will continue to attract risk weights in accordance with existing prudential norms.
The amendment has come into force with immediate effect and is expected to reduce capital requirements for Regional Rural Banks (RRBs) on eligible ECLGS 5.0-backed exposures, thereby supporting credit flow while recognizing the credit risk mitigation provided by the government-backed guarantee scheme.
[RBI/2026-27/135; DOR.STR.REC.114/21-01-002/2026-27]
