What changed
RBI has amended the Master Direction – Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Directions, 2025, via the Second Amendment Directions, 2026, to review the definition of Tier 1 capital and introduce an external auditor's certificate requirement for NBFCs.
What it means for you
This amendment aims to strengthen concentration risk management for NBFCs by ensuring that they maintain adequate capital buffers and adhere to prudential norms.
What you must do
- Review and update concentration risk management policies and procedures
- Obtain an external auditor's certificate for capital augmentation
- Submit the certificate to the Department of Supervision of RBI before reckoning additions to capital funds
Who it affects
All Non-Banking Financial Companies (NBFCs), RBI Department of Supervision
What is the purpose of this amendment?
To strengthen concentration risk management for NBFCs by ensuring that they maintain adequate capital buffers and adhere to prudential norms.
What is the new requirement for Tier 1 capital?
NBFCs must obtain an external auditor's certificate on completion of capital augmentation and submit it to RBI before reckoning additions to capital funds.