RBI notification RBI/2026-27/287 · 07 Oct 2026
Official title
Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026
Summary
Check the official recordThe Reserve Bank of India amends the prudential norms for small finance banks regarding risk weights for trade exposures to a Qualified Central Counterparty. Banks apply a 2 per cent risk weight to trade exposures for over-the-counter derivatives, exchange traded derivatives, and securities financing transactions. This requirement applies when a bank acts as a clearing member for its own purposes. It also applies when a bank provides clearing services to clients and holds an obligation to reimburse the client for losses if the Qualified Central Counterparty defaults. These directions take effect immediately.
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RBI/2026-27/287 DOR.MRG.REC.No.243/00-00-001/2026-27
October 7, 2026
Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Sixth Amendment Directions, 2026
Please refer to paragraph 75(5) (i) of the Reserve Bank of India (Small Finance Banks - Prudential Norms on Capital Adequacy) Directions, 2025, on the requirement for clearing member banks to obtain legal opinion. On a review, it has been decided to amend these Directions to align them with international standards.
Accordingly, in exercise of the powers conferred by Section 35A of the Banking Regulation Act, 1949 (hereinafter called the Act) and all other provisions / 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.
4.1 In paragraph 75(5)(i), sub-paragraph (a) shall be replaced by the following, namely: –
“(a) Where a bank acts as a clearing member of a QCCP for its own purposes, a risk weight of 2 per cent shall be applied to the bank’s trade exposure to the QCCP in respect of OTC derivatives transactions, exchange traded derivatives transactions, and SFTs. Where the clearing member (bank) offers clearing services to clients, the 2 per cent risk weight also applies to the clearing member’s (bank) trade exposure to the QCCP that arises in cases where the clearing member (bank) is obligated to reimburse the client for any losses on such transactions in the event that the QCCP defaults.”.
(Sunil T S Nair)
Chief General Manager
