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RBI Updates Capital Adequacy Norms for Payments Banks
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Reserve Bank of Indiabankingcorporate

RBI Updates Capital Adequacy Norms for Payments Banks

May 15, 2026

Amendments to the capital adequacy norms for Payments Banks now allow for quarterly profit recognition, contingent on audit compliance and prescribed deductions.

RBI (Payments Banks – Prudential Norms on Capital Adequacy) Second Amendment Directions, 2026

The Reserve Bank of India has issued the Second Amendment Directions regarding capital adequacy norms for Payments Banks. This amendment facilitates the inclusion of quarterly profits into Common Equity Tier 1 (CET1) capital calculations, thus improving financial management for these banks.

The new framework outlines that the recognition of profits must comply with audit requirements and includes specific provisions for deductions. By permitting this flexibility, the RBI aims to enhance the financial stability of Payments Banks while ensuring strong oversight mechanisms are in place.

Practitioners in financial services should closely monitor the implications of these changes on Payments Banks and ensure that their clients are prepared for the necessary compliance adjustments as profitability recognition processes evolve.

Citations

  • RBI Circular (2026) RBI News
Practice Areas:bankingcorporate

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