Source: Reserve Bank of India · RBI/2021-22/106 · issued 04 Oct 2021 · ~2 min read
Quick answerRBI has clarified that the 'eligible amount' for issuing Perpetual Debt Instruments (PDI) in foreign currency or rupee bonds overseas is the higher of 1.5% of RWAs or total AT1 capital as of March 31 of the previous year. Only up to 49% of this amount can be raised overseas.
What changed
RBI amended paragraph 1.16(ii) of Annex 4 to the Basel III Master Circular dated July 1, 2015. The 'eligible amount' for issuing PDIs in foreign currency or rupee bonds overseas is now defined as the higher of 1.5% of Risk Weighted Assets (RWAs) or total Additional Tier 1 capital as on March 31 of the previous financial year. The cap on overseas issuance remains at 49% of this eligible amount.
What it means for you
Banks now have a clear formula to calculate the maximum AT1 capital they can raise overseas. This removes ambiguity and ensures that banks with higher AT1 capital can raise more foreign currency or rupee-denominated bonds abroad. The 49% sub-limit remains, so banks must plan their overseas issuance within this cap.
Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.
What banks were required to do at the time
Recalculate your eligible amount for overseas AT1 issuance using the higher of 1.5% of RWAs or total AT1 capital as of March 31 of the previous year.
Ensure that foreign currency and rupee-denominated bond issuances do not exceed 49% of this eligible amount.
Review your current AT1 capital structure to align with the revised limit and plan future issuances accordingly.
Comply with all applicable prudential norms and FEMA guidelines for overseas issuances.
Who it affects
All Scheduled Commercial Banks (excluding RRBs), Treasury and capital management teams, Compliance and risk management departments
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
What is the 'eligible amount' for issuing AT1 bonds overseas?
The eligible amount is the higher of 1.5% of your bank's Risk Weighted Assets (RWAs) or the total Additional Tier 1 capital as on March 31 of the previous financial year.
Can we issue more than 49% of our eligible amount in foreign currency bonds?
No. The circular clearly states that not more than 49% of the eligible amount can be issued in foreign currency and/or rupee-denominated bonds overseas.
Does this apply to foreign bank branches in India?
The 49% cap on foreign currency issuance does not apply to foreign banks' branches, as noted in the annex. However, other terms remain applicable.
📜 This document’s life story (7 recorded events, each backed by RBI’s own words)
RBI’s words: “The circular ... shall stand repealed.”
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #281: DOR.CAP.REC.No.56/21.06.201/2021-22 — "Basel III Capital Regulations - Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital - Eligible Limit for Instr”
📜 Read the original circular — full text as issued by RBI
RBI/2021-22/106
DOR.CAP.REC.No.56/21.06.201/2021-22
October 4, 2021
All Scheduled Commercial Banks (Excluding RRBs)
Dear Sir/ Madam,
Basel III Capital Regulations - Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital – Eligible Limit for Instruments Denominated in Foreign Currency/Rupee Denominated Bonds Overseas
Please refer to paragraph 1.16 of Annex 4 (Criteria for Inclusion of Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital) to the Master Circular Ref DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’ and the circular Ref. DBR.BP.BC.No.28/21.06.001/2016-17 dated November 3, 2016 on Issue of Rupee Denominated Bonds Overseas.
2. Several banks have approached us to clarify the amount of capital funds that can be raised overseas. The issue has been examined and it is clarified that the “eligible amount” for purpose of issue of PDIs in foreign currency as per para 1.16 (ii) of Annex 4 to the Master Circular dated July 1, 2015 referred to above, would mean the higher of:
(a) 1.5% of Risk Weighted Assets (RWAs) and
(b) Total Additional Tier 1 capital
as on March 31 of the previous financial year.
Not more than 49% of the “eligible amount” as above can be issued in foreign currency and/or in rupee denominated bonds overseas.
3. Accordingly, the sub para (ii) of paragraph 1.16 of Annex 4 to the Master Circular dated July 1, 2015 referred to above is amended as indicated in Annex 1 enclosed herewith. An illustration is enclosed in Annex 2 for greater clarity.
4. All the other terms of the Master Circular on Basel III Capital Regulations dated July 1, 2015 , referred to above, as amended from time to time, shall remain unchanged. The issuances as above shall be subject to all applicable prudential norms and FEMA guidelines.
Yours faithfully
(Neeraj Nigam)
Chief General Manager-in-Charge
Annex 1
Amendment to sub para (ii) of paragraph 1.16 of Annex 4 to Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’
1.16 (ii) Not more than 49% of the eligible amount can be issued in foreign currency* and/or in rupee denominated bonds overseas.
“Eligible amount” in this context shall mean the higher of:
(a) 1.5% of RWA and
(b) Total Additional Tier 1 capital
as on March 31 of the previous financial year.
*Not applicable to foreign banks’ branches
Annex 2
Illustration on the “eligible amount” that can be raised as per Paragraph 1.16 (ii) of Annex 4 to Master Circular DBR.No.BP.BC.1/21.06.201/2015-16 dated July 1, 2015 on ‘Basel III Capital Regulations’
We consider the RWAs of the bank as on March 31 of previous financial year as ₹ 1000 crore.
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2021-22/106 · issued 04 Oct 2021. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly). Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12173&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.