Current · Source: Reserve Bank of India · RBI/2026-27/136 · issued 16 Jun 2026 · ~1 min read
Quick answerRBI has revised NBFC capital adequacy rules, allowing a zero risk weight for up to 75 % of the guaranteed portion of exposures under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, provided settlement is expected within 30 days of invocation.
The rule, in the simplest words
NBFCs (companies that lend money but are not banks) can now treat 75% of the guaranteed part of a loan under ECLGS 5.0 (a government scheme to help small businesses) as having zero risk weight (meaning they don't need to keep extra money aside for that part).
This zero risk weight only applies if the government pays back the guaranteed amount within 30 days after the NBFC asks for it.
The remaining 25% of the guaranteed part still needs the normal risk weight (so the NBFC must keep some money aside for it).
This change helps NBFCs use less of their own money to back these loans, making it easier to lend more to small businesses.
How it plays out — a real example
An NBFC compliance officer in Indore, Priya, processes a loan under ECLGS 5.0 for a small textile shop. She knows that 75% of the government-guaranteed portion of the loan now needs zero capital set aside, so she can approve the loan faster and use the freed-up capital to help another local business owner the same week.
What changed
The amendment introduces a zero‑risk‑weight for up to 75 % of the guaranteed portion of ECLGS 5.0 exposures, where the settlement amount is expected within thirty days; the remaining exposure continues to attract the risk weight prescribed in the existing guidelines.
What it means for you
This amendment is expected to reduce the capital requirements for NBFCs that participate in the ECLGS 5.0 scheme, making it easier for them to lend to small businesses and individuals. This, in turn, may boost economic growth and support the recovery of small businesses.
What you must do
Review your NBFC's capital adequacy ratios
Assess the impact of the amendment on your lending business
Consider participating in the ECLGS 5.0 scheme
Who it affects
Non-banking financial companies (NBFCs)
❓ Common questions
What is the ECLGS 5.0 scheme?
The Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 is a government-backed guarantee scheme administered by the National Credit Guarantee Trustee Company (NCGTC) that provides credit guarantees to small businesses and individuals. Refer to NCGTC circular dated May 8, 2026 for details.
📜 Read the original circular — full text as issued by RBI
RBI/2026-27/136
DOR.STR.REC.115/21-01-002/2026-27
June 16, 2026
Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026
Please refer to Reserve Bank of India (Non-Banking Financial Companies – 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 under Sections 45L of the Reserve Bank of India Act, 1934, 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 18(2)(iv)(f) 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 amendments shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/136 · issued 16 Jun 2026. The plain-English explanation above is BankPulse’s own independent summary.
Assess the impact of the amendment on your lending business
Consider participating in 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 an IT/Systems lead at a bank this circular applies to (Non-banking financial companies (NBFCs)), your first concrete step on “NBFC Capital Adequacy Update” is: “Review your NBFC's capital adequacy ratios” (RBI issued this 16 Jun 2026).
Circular: RBI/2026-27/136 -- NBFC Capital Adequacy Update
Issued: 16 Jun 2026
Action required: Review your NBFC's capital adequacy ratios
Action required: Assess the impact of the amendment on your lending business
Action required: Consider participating in 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
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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=13507&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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