Quick answerRBI updates risk weight norms for non-resident corporates and international credit rating agencies
What changed
The RBI has amended the capital adequacy norms for commercial banks, modifying the risk weight mapping for claims on non-resident corporates and adding CareEdge Global IFSC Limited as an approved international credit rating agency. The amendments also update the risk weights for unrated claims and claims with aggregate exposure above certain thresholds.
What it means for you
The changes aim to enhance the risk management framework for banks, ensuring they hold sufficient capital against potential losses from non-resident corporate exposures. This may impact banks' capital requirements and lending decisions, particularly for those with significant international exposures.
The rule, in the simplest words
Banks must set aside more or less money (called 'risk weight') for loans to companies outside India (non-resident corporates), based on the company's credit rating from approved agencies.
A new rating agency called 'CareEdge Global IFSC Limited' is now allowed to give ratings for loans made at special finance centers (IFSCs), and banks must use its ratings to decide risk weights.
For loans without a credit rating (unrated claims) or very big loans (above certain limits), banks must use special risk weights to make sure they have enough safety money.
How it plays out — a real example
A gold-loan officer in Mumbai reviews a loan request from a non-resident corporate. She checks the company's rating from CareEdge Global IFSC Limited, which is now an approved agency, and uses the new risk weight table to calculate how much extra capital the bank must hold, ensuring the loan is safe and follows the RBI's updated rules.
What you must do
Review existing non-resident corporate exposures and update risk weights accordingly
Ensure compliance with the amended capital adequacy norms
Assess the impact on capital requirements and lending strategies
Who it affects
Commercial banks, Non-resident corporates with Indian exposures
What are the key changes to the risk weight mapping?
The RBI has updated the risk weight mapping for claims on non-resident corporates, with new risk weights assigned based on ratings from international credit rating agencies.
Which international credit rating agencies are approved for risk weighting purposes?
The RBI has approved CareEdge Global IFSC Limited, Fitch, Moody's, and Standard & Poor's for risk weighting purposes.
When do the amendments come into effect?
The amendments come into effect immediately.
📜 Read the original circular — full text as issued by RBI
RBI/2025-26/189
DOR.STR.REC.390/21-01-002/2025-26
January 09, 2026
Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Amendment Directions, 2026
Please refer to Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025 (hereinafter referred to as ‘the Directions’).
2. On a review, and in exercise of the powers conferred by the section 35A of the Banking Regulation Act, 1949 and all other laws enabling the Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
3. The Amendment Directions modifies the Directions as under:
(1) Para 49 shall be substituted by the following:
“49. The claims on non-resident corporates shall be risk weighted as under as per the ratings assigned by international rating agencies. Further, with regard to claims on all non-resident corporates originating at International Financial Services Centre (IFSC) for which ratings are assigned by M/s CareEdge Global IFSC Limited, the mapping shall be as per Table 10.2 below.
Table 10.1: Claims on non-resident corporates - risk weight mapping for the ratings assigned by S&P/Fitch/Moody’s Ratings
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/189 · issued 09 Jan 2026. The plain-English explanation above is BankPulse’s own independent summary.
Test yourself
Quick self-check built only from the facts already on this page — tap a question to reveal the answer.
Q1. In one line, what does this circular do?
RBI updates risk weight norms for non-resident corporates and international credit rating agencies
Q2. Who does this circular apply to?
Commercial banks, Non-resident corporates with Indian exposures
Q3. What is the first thing you should do about it?
Review existing non-resident corporate exposures and update risk weights accordingly
Ensure compliance with the amended capital adequacy norms
Assess the impact on capital requirements and lending strategies
📜 Compliance
Review existing non-resident corporate exposures and update risk weights accordingly
Ensure compliance with the amended capital adequacy norms
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template
Example: if you are a Compliance officer at a bank this circular applies to (Commercial banks, Non-resident corporates with Indian exposures), your first concrete step on “RBI Amends Capital Adequacy Norms” is: “Review existing non-resident corporate exposures and update risk weights accordingly” (RBI issued this 09 Jan 2026).
Circular: RBI/2025-26/189 -- RBI Amends Capital Adequacy Norms
Action required: Ensure compliance with the amended capital adequacy norms
Action required: Assess the impact on capital requirements and lending strategies
Owner: ____________ Target date: ____________
Board/committee approval needed? Y / N
Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.
AI-drafted · AI fact-check pending · under the editorial review of our expert review panel · decoded & published by BankPulse · 06 Jul 2026, 13:08 IST
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13265&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert review panel. Independent platform, not affiliated with the Reserve Bank of India; never reproduces RBI text verbatim.
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