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Capital Adequacy Norms: Sub-paragraph 21(i)(b) Deleted

Current · Source: Reserve Bank of India · RBI/2026-27/90 · issued 18 May 2026 · ~2 min read
Quick answerRBI has deleted sub-paragraph 21(i)(b) from the Prudential Norms on Capital Adequacy Directions, 2025, effective May 18, 2026. This follows changes to investment portfolio classification rules. Banks must update their capital adequacy compliance frameworks accordingly.
The rule, in the simplest words
How it plays out — a real example

A treasury officer in Indore, Priya, is updating her bank's compliance checklist. She sees that the old rule about capital adequacy for certain investments is gone. She tells her team, 'We no longer need to calculate that extra safety buffer for those bonds. Let's remove it from our reports and train everyone on the new simpler rule.'

What changed

RBI issued the Sixth Amendment to the Commercial Banks – Prudential Norms on Capital Adequacy Directions, 2025, effective May 18, 2026. The amendment deletes sub-paragraph 21(i)(b) from the 2025 Directions. This change is linked to the earlier issuance of the Second Amendment Directions on Classification, Valuation, and Operation of Investment Portfolio.

What it means for you

Deleting sub-paragraph 21(i)(b) removes a provision from the Capital Adequacy Directions. The change is consequent to the Second Amendment Directions on Investment Portfolio. Banks should review the original Directions to understand the specific requirement removed and assess any impact on capital adequacy calculations.

What you must do

Who it affects

All commercial banks in India, Treasury and investment portfolio teams, Risk management and compliance departments, Regulatory reporting teams

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

Why was sub-paragraph 21(i)(b) deleted?

The deletion is consequent to the issuance of the Second Amendment Directions on Classification, Valuation, and Operation of Investment Portfolio, 2026.

Does this amendment affect my bank's capital adequacy ratio (CAR)?

The impact depends on the content of the deleted sub-paragraph, which is not specified in the source. Banks should review the original Directions to assess any effect on risk-weighted assets and CAR.

When does this amendment take effect?

The amendment came into effect from the date of issue, May 18, 2026.

📜 Read the original circular — full text as issued by RBI
RBI/2026-27/90 DOR.MRG.REC.No.78/21-01-002/2026-27 May 18, 2026 Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026 Please refer to Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Directions, 2025, dated November 28, 2025 . 2. On a review, consequent to the issuance of Reserve Bank of India (Commercial Banks - Classification, Valuation, and Operation of Investment Portfolio) Second Amendment Directions, 2026, and in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (hereinafter called the Act) 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. 3. (i) These Directions shall be called the Reserve Bank of India (Commercial Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026. (ii) These Amendment Directions shall come into effect from the date of issue. 4. The Reserve Bank of India (Commercial Banks - Prudential Norms on Capital Adequacy) Directions, 2025 , are amended as provided below. (i) Sub-paragraph 21(i)(b) shall be deleted. (Sunil T S Nair) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2026-27/90 · issued 18 May 2026. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
💻 IT / Systems
  • Review the deleted sub-paragraph 21(i)(b) from the 2025 Directions to understand which capital adequacy provision no longer applies.
  • Update internal capital adequacy policies, risk management systems, and regulatory reporting templates to reflect the deletion.
  • Train relevant treasury and compliance teams on the revised capital adequacy framework.
📜 Compliance
  • Cross-reference with the Second Amendment Directions on Investment Portfolio to identify any new or modified requirements.
  • Monitor RBI's future circulars for any consequential amendments or clarifications.
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 (All commercial banks in India, Treasury and investment portfolio teams, Risk management and compliance departments, Regulatory reporting teams), your first concrete step on “Capital Adequacy Norms: Sub-paragraph 21(i)(b) Deleted” is: “Review the deleted sub-paragraph 21(i)(b) from the 2025 Directions to understand which capital adequacy provision no longer applies.” (RBI issued this 18 May 2026).

  1. Circular: RBI/2026-27/90 -- Capital Adequacy Norms: Sub-paragraph 21(i)(b) Deleted
  2. Issued: 18 May 2026
  3. Action required: Review the deleted sub-paragraph 21(i)(b) from the 2025 Directions to understand which capital adequacy provision no longer applies.
  4. Action required: Cross-reference with the Second Amendment Directions on Investment Portfolio to identify any new or modified requirements.
  5. Action required: Update internal capital adequacy policies, risk management systems, and regulatory reporting templates to reflect the deletion.
  6. Action required: Train relevant treasury and compliance teams on the revised capital adequacy framework.
  7. Action required: Monitor RBI's future circulars for any consequential amendments or clarifications.
  8. Owner: ____________ Target date: ____________
  9. Board/committee approval needed? Y / N
  10. Evidence filed in compliance register on: ____________
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BankPulse Compliance Evidence Pack — generated 02 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=13457&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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