The Reserve Bank of India has issued the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Second Amendment Directions, 2026, which came into force with immediate effect. The amendment modifies paragraph 9(iii) of the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025 to clarify the treatment of quarterly profits while computing Owned Fund of NBFCs. Under the revised provision, free reserves may include quarterly profits, provided the financial statements are subjected to limited review or audit by statutory auditors on a quarterly basis. The amount of profit eligible for inclusion must be reduced by the average dividend paid during the last three financial years, calculated using the prescribed formula (EPt = NPt − 0.25 × D × t). Further, any losses incurred during the current financial year must be fully deducted from the Owned Fund.
These Amendment Directions shall come into force immediately.Link – https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=13311&Mode=0
