The Reserve Bank of India, through the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026, amended the capital adequacy framework applicable to Non-Banking Financial Companies (NBFCs) to extend regulatory recognition 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 18(2)(iv)(f) into the 2025 Directions with immediate effect. Under the amendment, exposures guaranteed under ECLGS 5.0 will 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. Any remaining exposure will continue to attract risk weights under existing prudential norms. The amendment aims to improve capital efficiency and support credit expansion by NBFCs through recognition of government-backed credit guarantees.
Reserve Bank of India
RBI/2026-27/136
DOR.STR.REC.115/21-01-002/2026-27 | Dated: June 16, 2026
Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Third Amendment Directions, 2026
Please refer to Reserve Bank of India (Non-Banking Financial Companies – 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 under Sections 45L of the Reserve Bank of India Act, 1934, and all other laws enabling the Reserve Bank in this regard, the Reserve Bank being satisfied that it is necessary and expedient in the public interest so to do, hereby issues the Amendment Directions hereinafter specified.
4. These Amendment Directions shall amend the Directions as specified below:
(1) Paragraph 18(2)(iv)(f) 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 amendments shall come into force with immediate effect.
(Vaibhav Chaturvedi)
Chief General Manager
