The Reserve Bank of India (RBI) on March 10, 2026, issued the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Second Amendment Directions, 2026, further to amend the Reserve Bank of India (Non‑Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025.
The following has been amended:
• The amendment clarifies the components to be considered while calculating the “Owned Fund” of NBFCs. Under the revised provision, free reserves may include quarterly profits, provided that the financial statements are reviewed or audited quarterly by statutory auditors.
• However, the eligible profit that can be included shall be reduced by the average dividend paid during the last three financial years, calculated through a specified formula. The amendment also provides that any losses incurred during the current financial year shall be fully deducted from the Owned Fund.
• These directions shall come into force with immediate effect.
[Notification no. - RBI/2025-26/226 DOR.CAP.REC.No.416/21.01.002/2025-26]
