What changed
The previous sub-paragraph 10(5)(ii) under 'Exposures' in the Notes to Accounts chapter has been deleted. A new sub-paragraph (iia) has been inserted, which prescribes a detailed table for reporting capital market exposure across ten specific categories, including direct investments, advances secured by shares, and exposures to capital market intermediaries.
What it means for you
Small Finance Banks must now provide a granular, line-item breakdown of their capital market exposure in financial statements, replacing the earlier simpler disclosure. This enhances transparency and aligns with the broader Credit Facilities Amendment Directions, 2026. Banks need to update their reporting templates and ensure data capture systems can generate the required 10-item table.
What you must do
- Delete the existing sub-paragraph 10(5)(ii) disclosure from your Notes to Accounts.
- Insert the new 10-item capital market exposure table as per the prescribed format.
- Update internal reporting systems to capture data for all ten categories, including REITs, InvITs, AIFs, and irrevocable payment commitments.
- Coordinate implementation with the rollout of the Credit Facilities Amendment Directions, 2026, ensuring compliance by April 1, 2026 at the latest.
- Train finance and compliance teams on the new disclosure requirements and computation methodology.
Who it affects
Small Finance Banks, SFB finance and accounts departments, SFB compliance and risk management teams, Auditors reviewing SFB financial statements
When must we start using the new capital market exposure table?
The amendment takes effect from the date your bank decides to implement the Reserve Bank of India (Small Finance Banks – Credit Facilities) Amendment Directions, 2026, or from April 1, 2026, whichever is earlier. You must adopt the new table from that date.
What items are included in the new capital market exposure disclosure?
The table covers ten items: direct investments in equity/preference shares, convertible bonds/debentures, units of non-debt mutual funds, REITs, InvITs, and AIFs; advances for share investment; advances secured by shares; advances collateralized by shares; credit to capital market intermediaries; financing to non-debt mutual funds; loans for acquiring promoters' shares in infrastructure companies; underwriting commitments; irrevocable payment commitments; and trade exposures of clearing member banks.
Does this change affect how we compute capital market exposure limits?
Yes. The note in the table states that the exposure reported must be computed in line with the Reserve Bank of India (Small Finance Banks - Concentration Risk Management) Directions, 2025 read with the Reserve Bank of India (Small Finance Banks – Credit Facilities) Directions, 2025. Ensure your calculations follow those guidelines.