RBI Seeks Comments on CET1 Capital for CRAR

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  • Last Updated on 12 April, 2026

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RBI CET1 quarterly profits

Press Release: 2026-2027/45, Dated: 08.04.2026

The Reserve Bank of India (RBI) has issued draft amendment directions to review the guidelines on the inclusion of quarterly profits in Common Equity Tier 1 (CET1) capital for the purpose of computing the Capital to Risk-weighted Assets Ratio (CRAR) of banks.

1. Objective of the Draft Amendment

The proposal aims to:

  • Simplify the regulatory framework for capital computation
  • Align treatment of interim profits with evolving supervisory expectations
  • Enhance clarity and consistency in CRAR calculations

2. Key Proposed Change

The draft proposes to remove the condition relating to deviation in incremental Non-Performing Asset (NPA) provisions

This condition earlier acted as a constraint on the inclusion of quarterly profits in CET1 capital.

3. Implications for Banks

If implemented, the amendment may:

  • Provide greater flexibility in recognising interim profits as capital
  • Reduce operational complexity in compliance
  • Potentially improve capital adequacy positioning

4. Public Consultation

  • The RBI has invited comments and feedback from stakeholders
  • The last date for submission of comments is 29th April 2026

5. Conclusion

The draft directions reflect RBI’s intent to streamline capital adequacy norms while maintaining prudential safeguards, with stakeholder inputs expected to shape the final framework.

Click Here To Read The Full Press Release

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Author: Taxmann

Taxmann Publications has a dedicated in-house Research & Editorial Team. This team consists of a team of Chartered Accountants, Company Secretaries, and Lawyers. This team works under the guidance and supervision of editor-in-chief Mr Rakesh Bhargava.

The Research and Editorial Team is responsible for developing reliable and accurate content for the readers. The team follows the six-sigma approach to achieve the benchmark of zero error in its publications and research platforms. The team ensures that the following publication guidelines are thoroughly followed while developing the content:

  • The statutory material is obtained only from the authorized and reliable sources
  • All the latest developments in the judicial and legislative fields are covered
  • Prepare the analytical write-ups on current, controversial, and important issues to help the readers to understand the concept and its implications
  • Every content published by Taxmann is complete, accurate and lucid
  • All evidence-based statements are supported with proper reference to Section, Circular No., Notification No. or citations
  • The golden rules of grammar, style and consistency are thoroughly followed
  • Font and size that's easy to read and remain consistent across all imprint and digital publications are applied