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RBI Updates Basel III Capital Regulations for Perpetual Debt Instruments

No longer current — withdrawn, no replacement on file yet

Source: Reserve Bank of India · RBI/2025-26/87 · issued 29 Sep 2025 · ~1 min read

Quick answerRBI revises eligible limit for Perpetual Debt Instruments (PDI) denominated in foreign currency/rupee denominated bonds overseas in Additional Tier 1 Capital, effective October 1, 2025.

What changed

RBI has revised the eligible limit for Perpetual Debt Instruments (PDI) denominated in foreign currency or rupee-denominated bonds overseas. The revised limit is 1.5% of Risk Weighted Assets (RWAs) as per the latest available financial statements.

What it means for you

This update affects banks' capital adequacy requirements and may impact their ability to issue PDI instruments. Banks must reassess their capital planning and ensure compliance with the revised limits.

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

Review and update capital planning to reflect the revised eligible limit for PDI instruments
Ensure compliance with the revised limits by October 1, 2025
Assess the impact on existing PDI instruments and adjust accordingly

Who it affects

All Payments Banks

❓ Common questions

Regulatory timeline

Stated effective date effective October 1, 2025
Decoded by BankPulse 2026-06-18 01:01 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn 03 Aug 2026, 04:00 IST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 revised eligible limit for PDI instruments?

The revised limit is 1.5% of Risk Weighted Assets (RWAs) as per the latest available financial statements.

When does the revised limit come into effect?

The revised limit comes into effect on October 1, 2025.

What is the impact on existing PDI instruments?

Banks must assess the impact on existing PDI instruments and adjust accordingly to ensure compliance with the revised limits.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)

Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)

RBI’s words: “Official withdrawal register entry #19: DOR.CAP.REC.No.55/21.01.002/2025-26 — "Reserve Bank of India (Basel III Capital Regulations - Perpetual Debt Instruments (PDI) in Additional Tier 1 Capital – El”

📜 Read the original circular — full text as issued by RBI

RBI/2025-26/87
 DOR.CAP.REC.No.55/21.01.002/2025-26
 September 29, 2025
 All Payments Banks
 Reserve Bank of India (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) Directions, 2025
 The Reserve Bank had issued a circular DOR.CAP.REC.No.56/21.06.201/2021-22 dated October 4, 2021 on “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” (hereinafter referred to as “the circular”). On a review, it has been decided to revise the existing eligible limit applicable to PDIs denominated in foreign currency/rupee denominated bonds overseas.
 2. Accordingly, in exercise of the powers conferred by 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 to do so, hereby issues the Directions hereinafter specified.
 3. (i) These Directions shall be called the “Reserve Bank of India (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) Directions, 2025”.
 (ii) These Directions shall come into force from October 01, 2025.
 4. In supersession of the circular ibid, the revised limits applicable to PDIs denominated in foreign currency/rupee denominated bonds overseas shall be as under:
 “Perpetual Debt Instruments (PDIs) issued in foreign currency/ rupee denominated bonds overseas shall be eligible for inclusion in Additional Tier 1 (AT1) capital up to a maximum amount of 1.5 per cent of Risk Weighted Assets (RWAs) as per the latest available financial statements (audited or subjected to limited review).” 
 5. The circular DOR.CAP.REC.No.56/21.06.201/2021-22 dated October 4, 2021 on “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” shall stand repealed.
 (Usha Janakiraman)
 Chief General Manager-in-Charge

Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2025-26/87 · issued 29 Sep 2025. The plain-English explanation above is BankPulse’s own independent summary.

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Key termsPlain-English definitions of terms in this circular — see the full Indian banking glossary. CRAR (Capital adequacy) · Tier 1 & Tier 2 capital · Risk-Weighted Assets (RWA) · LCR (Liquidity Coverage Ratio)

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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=12906&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.