9 April 2026
Bankopedia Banking Digest — 2026-04-09 #15
- #1economic_timespositive
RBI Scraps IFR, Eases Capital Recognition Rules
The Reserve Bank of India proposes to remove the non-performing asset provisioning condition tied to quarterly profit inclusion in capital adequacy ratios, freeing banks to recognise earnings faster. Separately, the RBI will scrap the Investment Fluctuation Reserve requirement, citing evolved prudential norms including existing market risk capital charges.
RBI removes two capital constraints, allowing banks to count quarterly profits freely in adequacy ratios.
banking_supervisionnpa_resolutionregulation - #2financial_expresspositive
Quarterly Profits Now Freely Count Toward Bank Capital
RBI Governor Sanjay Malhotra announced plans to let banks include quarterly profits in capital adequacy calculations without the 25% non-performing asset provisioning deviation condition, aligning banks with non-banking finance companies. Industry leaders say the move will bolster Tier-I capital on a quarterly basis and free up funds for lending.
Removing the provisioning condition lets banks boost Tier-I capital quarterly, unlocking more funds for lending.
banking_supervisionnpa_resolutionregulation - #3moneycontrolpositive
RBI Streamlines Capital Norms, Drops Provisioning Condition
The RBI proposes to allow banks to include quarterly profits in capital-to-risk-weighted assets ratio calculations regardless of bad loan provisioning levels, streamlining capital requirements. The central bank will also withdraw the Investment Fluctuation Reserve mandate, with draft directions open for public consultation.
RBI aligns bank capital norms with non-banking finance companies by dropping provisioning-linked profit conditions.
regulationcapital_markets - #4moneycontrolpositive
IFR Balances Reclassified as Core Tier-I Capital
The RBI has decided to eliminate the Investment Fluctuation Reserve requirement for commercial banks, directing that outstanding IFR balances be reclassified as Tier-I capital via transfer to statutory or general reserves. Draft directions open for comment until April 29, 2026 also cover revisions for smaller bank categories to harmonise requirements.
Outstanding IFR balances will convert to Tier-I capital, directly strengthening banks' core capital positions.
banking_supervisionregulation - #5moneycontrolneutral
Non-Bank Entities Enter Term Money Market Arena
The RBI is opening the term money market to non-bank entities including All India Financial Institutions, non-banking finance companies, housing finance companies, and corporates, previously restricted to banks and primary dealers. Borrowing limits for standalone primary dealers will also rise, aiming to deepen liquidity and improve transmission of policy rate signals.
Non-bank entities gain term money market access, broadening liquidity sources and strengthening interest rate transmission.
monetary_policypayments - #6economic_timesneutral
RBI Retires Investment Fluctuation Reserve Requirement
The Reserve Bank of India (RBI) proposes scrapping the Investment Fluctuation Reserve (IFR) requirement for commercial banks, citing advances in the prudential regulatory framework that already address market risk. Governor Sanjay Malhotra announced draft directions will be issued for public consultation shortly.
RBI to eliminate IFR buffer for commercial banks, streamlining capital requirements under updated prudential norms.
regulationbanking_supervision - #7hindu_businesslinepositive
Capital Framework Overhaul Targets Regulatory Consistency
The RBI moves to abolish the Investment Fluctuation Reserve for commercial banks and harmonise guidelines across all bank categories, reducing regulatory inconsistency. Additionally, it proposes removing the Non-Performing Asset provisioning condition tied to quarterly profit inclusion in Capital to Risk-weighted Assets Ratio calculations.
RBI drops IFR mandate and eases NPA provisioning condition for quarterly profit inclusion in capital ratios.
banking_supervisionregulation - #8moneycontrolpositive
Simplified TReDS Access Broadens MSME Credit Reach
The RBI proposes eliminating due diligence requirements at the onboarding stage for micro, small and medium enterprises (MSMEs) on the Trade Receivables Discounting System (TReDS), aiming to accelerate access to working capital. The move is part of a broader regulatory review of the TReDS framework, with draft directions due for public consultation.
RBI removes MSME onboarding due diligence on TReDS to unlock faster invoice discounting and working capital access.
financial_inclusioncredit_markets - #9moneycontrolneutral
RBI Flags NDF Curbs As Temporary Market Intervention
RBI Governor Sanjay Malhotra confirms that restrictions on offshore non-deliverable forward (NDF) markets are a temporary response to excessive rupee volatility and speculative bank positioning in March, not a structural policy shift. The rupee stabilised at 92.58 against the dollar following the measures, down from an all-time low of 95.
RBI's offshore NDF curbs are temporary volatility controls, not a signal of structural market policy change.
forexregulation - #10moneycontrolneutral
Bank-NBFC Capital Alignment Signals Regulatory Maturity
Governor Malhotra positions the IFR removal and capital adequacy refinements as steps to align bank regulations with those governing non-banking financial companies (NBFCs), improving capital efficiency without weakening prudential safeguards. He reassures markets that recent stress at select private sector banks is entity-specific and poses no systemic risk.
RBI aligns bank capital rules with NBFC norms and affirms banking system resilience amid isolated lender stress.
regulationbanking_supervision