Current · Source: Reserve Bank of India · RBI/2026-27/132 · issued 16 Jun 2026 · ~1 min read
Quick answerRBI updates capital adequacy norms for commercial banks, introducing zero risk weight for 75% of ECLGS 5.0 guaranteed exposures.
The rule, in the simplest words
For loans covered by the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, banks count 75% of the guaranteed part as zero‑risk (risk weight of 0%).
The remaining 25% of each loan is still given the normal risk rating as per existing rules.
Because less risk is counted, banks need to keep less extra money (capital) aside for these loans, letting them lend more to eligible borrowers.
The new rule starts right away, so banks must update their calculations today.
How it plays out — a real example
Rohit Sharma, a senior credit officer in Delhi, reviews the bank’s list of ECLGS 5.0 loans, marks 75% of the guaranteed amount as zero‑risk, updates the capital adequacy numbers, and then feels comfortable approving a new loan for a small textile unit under the scheme.
What changed
The Reserve Bank of India has amended the prudential norms on capital adequacy for commercial banks. A new paragraph has been inserted, which states that exposures guaranteed under the Emergency Credit Line Guarantee Scheme 5.0 will attract a zero percent risk weight to the extent of 75% of the guaranteed portion. The remaining exposure will attract a risk weight as per existing guidelines.
What it means for you
This amendment is expected to provide relief to banks by reducing their capital requirements for ECLGS 5.0 exposures. It may also encourage banks to lend more to eligible borrowers under the scheme. The reduced risk weight will help banks to manage their capital more efficiently and support economic growth.
What you must do
Review existing ECLGS 5.0 exposures and calculate the reduced risk weight
Update capital adequacy calculations to reflect the new risk weight
Consider increasing lending to eligible borrowers under the ECLGS 5.0 scheme
Who it affects
Commercial banks, Eligible borrowers under ECLGS 5.0
❓ Common questions
What is the risk weight for ECLGS 5.0 guaranteed exposures?
Zero percent for 75% of the guaranteed portion
When does the amendment come into effect?
Immediately
How will the amendment impact banks?
It will reduce their capital requirements for ECLGS 5.0 exposures
📜 Read the original circular — full text as issued by RBI
RBI/2026-27/132
DOR.STR.REC.111/21-01-002/2026-27
June 16, 2026
Reserve Bank of India (Commercial Banks- Prudential Norms on Capital Adequacy) Ninth 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. Please refer to circular Ref no. 0264/NCGTC/ECLGS5.0 dated May 08, 2026, issued by National Credit Guarantee Trustee Company (NCGTC) in respect of Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, introduced by the Government of India.
3. 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.
4. These Amendment Directions shall amend the Directions as specified below:
(1) Paragraph 34A shall be inserted as below:
“Exposures guaranteed under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 shall attract risk weight of zero percent to the extent of 75% of the guaranteed portion, i.e., to the extent of guaranteed portion wherein the settlement amount is expected to be received within thirty days from the date of invocation. The remaining exposure shall attract risk weight as per the extant guidelines.”
5. The above amendment shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/132 · issued 16 Jun 2026. The plain-English explanation above is BankPulse’s own independent summary.
Update capital adequacy calculations to reflect the new risk weight
📜 Compliance
Review existing ECLGS 5.0 exposures and calculate the reduced risk weight
Consider increasing lending to eligible borrowers under the ECLGS 5.0 scheme
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, Eligible borrowers under ECLGS 5.0), your first concrete step on “RBI Amends Capital Adequacy Norms” is: “Review existing ECLGS 5.0 exposures and calculate the reduced risk weight” (RBI issued this 16 Jun 2026).
Circular: RBI/2026-27/132 -- RBI Amends Capital Adequacy Norms
Issued: 16 Jun 2026
Action required: Review existing ECLGS 5.0 exposures and calculate the reduced risk weight
Action required: Update capital adequacy calculations to reflect the new risk weight
Action required: Consider increasing lending to eligible borrowers under the ECLGS 5.0 scheme
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.
💬 Banker Discussion
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 01 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=13503&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.
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