The Reserve Bank of India (RBI) on March 21, 2025, issued a notification regarding the treatment of Right-of-Use (ROU) Asset for Regulatory Capital Purposes.
The following has been stated: -
•The Reserve Bank of India clarifies that for regulatory capital purposes; entities are not required to deduct the Right-of-Use (ROU) asset created under Ind AS 116 from Owned Fund/CET 1/Tier 1 capital, provided the leased asset is tangible.
•The ROU asset will be risk-weighted at 100%, similar to owned tangible assets. This applies to all NBFCs, HFCs, and Asset Reconstruction Companies under Ind AS 116.
•The changes are effective immediately.
The detailed notification is given in the document below.
[Notification No. RBI/2024-2025/128 DOR.CAP.REC.No.68/21.01.002/2024-25]
