The Reserve Bank of India, through the Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026, amended the capital adequacy framework applicable to All India Financial Institutions (AIFIs) by extending preferential regulatory treatment to exposures covered under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0. Exercising powers under Section 45L of the Reserve Bank of India Act, 1934, RBI inserted Paragraph 29A into the 2025 Directions with immediate effect. The amendment provides that exposures guaranteed under ECLGS 5.0 shall attract a zero percent risk weight to the extent of 75% of the guaranteed portion, provided the settlement amount is expected to be received within thirty days from the date of invocation of the guarantee. The remaining exposure will continue to attract risk weights under existing prudential norms. The measure seeks to improve capital efficiency for AIFIs, facilitate lending, and align regulatory treatment with the credit protection available under the government-backed guarantee scheme.
Reserve Bank of India
RBI/2026-27/133
DOR.STR.REC.112/21-01-002/2026-27 | Dated: June 16, 2026
Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026
Please refer to Reserve Bank of India (All India Financial Institutions – Prudential Norms on Capital Adequacy) Directions, 2025 (hereinafter referred to as ‘the Directions’).
2. Please refer to circular Ref no. 0264/NCGTC/ECLGS5.0 dated May 08, 2026, issued by National Credit Guarantee Trustee Company (NCGTC) in respect of Emergency Credit Line Guarantee Scheme (ECLGS) 5.0, introduced by the Government of India.
3. In exercise of the powers conferred by Section 45 L of the Reserve Bank of India Act, 1934, and all other provisions / laws enabling the Reserve Bank of India in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Directions hereinafter specified.
4. These Amendment Directions shall amend the Directions as specified below:
(1) Paragraph 29A shall be inserted as below:
“Exposures guaranteed under the Emergency Credit Line Guarantee Scheme (ECLGS) 5.0 shall attract risk weight of zero percent to the extent of 75% of the guaranteed portion, i.e., to the extent of guaranteed portion wherein the settlement amount is expected to be received within thirty days from the date of invocation. The remaining exposure shall attract risk weight as per the extant guidelines.”
5. The above amendment shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
