PR No. 2025-2026/1911; dated: 13.01.2026
1. Introduction
Reserve Bank of India (RBI) has released draft amendment directions clarifying the computation of Owned Fund and Tier 1 Capital for Non-Banking Financial Companies (NBFCs) and Asset Reconstruction Companies (ARCs).
2. Objective Of The Draft Directions
The draft aims to bring greater clarity and uniformity in regulatory capital computation and its linkage with credit and investment concentration norms. It seeks to strengthen prudential regulation and ensure adequate capital buffers across NBFCs and ARCs.
3. Minimum Capital And Regulatory Requirements
The draft directions prescribe minimum capital requirements for NBFCs and lay down revised norms for determining regulatory capital. These provisions are intended to enhance financial resilience and risk absorption capacity within the NBFC sector.
4. Treatment Of Instruments And Deferred Taxes
RBI has specified the terms and conditions under which perpetual debt instruments will qualify for inclusion in Tier 1 capital. The draft also clarifies the treatment of deferred tax assets and deferred tax liabilities for the purpose of regulatory capital computation.
5. Conclusion
The draft amendment directions reflect RBI’s continued focus on strengthening the capital framework for NBFCs and ARCs. Once finalised, these norms are expected to improve transparency, consistency, and regulatory compliance across the sector.
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