The Reserve Bank of India issued the Reserve Bank of India (Standalone Primary Dealers) Amendment Directions, 2026, amending the Master Direction issued in November 2025 to clarify the components and computation of Tier 1 capital and its application for exposure norms. The amendment specifies that Tier 1 capital for Standalone Primary Dealers (SPDs) will include paid-up capital, statutory reserves, other disclosed free reserves, and eligible quarterly profits, subject to conditions. Quarterly profits can be included only if financial statements undergo limited review or audit by statutory auditors, and the eligible amount must be reduced by the average dividend paid during the previous three years based on a prescribed formula. The Directions also mandate deduction of losses in the current year, investments in subsidiaries, intangible assets, deferred tax assets, and carried-forward losses while computing Tier 1 capital. Additionally, compliance with exposure norms must be based on the latest available audited or reviewed financial statements. The amendments aim to improve clarity, prudential capital computation, and regulatory consistency for SPDs.
Reserve Bank of India
RBI/2025-26/232
DOR.CAP.REC.No.422/21.01.002/2025-26 | Dated: March 10, 2026
All Standalone Primary Dealers (SPDs)
Dear Sir / Madam,
Reserve Bank of India (Standalone Primary Dealers) Amendment Directions, 2026
The Reserve Bank had issued the Reserve Bank of India (Standalone Primary Dealers) Directions, 2025 (hereafter referred as the ‘Master Direction’), on November 28, 2025, as amended from time to time. There is a need to further amend the same to provide clarification on the components reckoned in the computation of Tier 1 capital, as well as to review the definition of Tier 1 capital being reckoned for complying with extant exposure norms.
2. Accordingly, In exercise of the powers conferred under Sections 45JA, 45K, 45L, and 45M of the Reserve Bank of India Act, 1934 (2 of 1934), and of all powers enabling it in this behalf, the Reserve Bank, having considered it necessary in the public interest, and being satisfied that, for the purpose of enabling it to regulate the financial system to the advantage of the country so to do, hereby, issues the following Amendment Directions.
3. These Directions shall be called the Reserve Bank of India (Standalone Primary Dealers) Amendment Directions, 2026.
4. These Amendment Directions shall come into force with immediate effect.
5. These Amendment Directions modify the Master Direction as under:
(1) Paragraph 9(6) shall be replaced by:
“9(6) Tier 1 capital means paid-up capital, statutory reserves and other disclosed free reserves including quarterly profits.
Inclusion of quarterly profits shall be subject to the following conditions:
(i) The financial statements shall be subjected to limited review / audit on a quarterly basis by the statutory auditors.
(ii) Such profits shall be reduced by average dividend paid in the last three years and the amount which can be reckoned for inclusion would be arrived at as under:
EPt = NPt – 0.25 *D*t
Where:
EPt = Eligible profit up to quarter ‘t’ of the current financial year, t varies from 1
to 4
NPt = Net profit up to quarter ‘t’
D = average dividend paid for / pertaining to the last three financial years
Losses in the current year shall be fully deducted from Tier 1 capital.
Investment in subsidiaries (where applicable), intangible assets, losses in current accounting period, deferred tax asset and losses brought forward from previous accounting periods shall be deducted from the Tier 1 capital.”
(2) The following paragraphs shall be inserted after paragraph 159(6):
“159(7) The applicable Tier 1 Capital for compliance with the norms stated in subparagraphs 159(1) to 159(6) above, shall be determined based on the SPD’s latest available financial statements (audited or subject to limited review).
159(8) In this context, the term “Tier 1 Capital” shall be as defined in paragraph 9(6) of the Master Directions.”
Yours faithfully,
Sunil T S Nair
Chief General Manager
