The Reserve Bank of India has amended its payments bank capital adequacy directions to let payments banks include profits earned in the current financial year in Common Equity Tier 1 capital for capital to risk weighted assets ratio calculations on a quarterly basis. The change applies with immediate effect. Quarterly profit recognition is allowed only if the financial statements are audited or subject to limited review each quarter. Eligible profit is to be calculated as net profit up to the relevant quarter minus 0.25 times the average dividend paid during the last three financial years multiplied by the quarter number. Any cumulative net loss up to the quarter end must be fully deducted when calculating CET1 capital for that quarter.
Reserve Bank of India 2026-05-08
Reserve Bank of India revises payments bank capital rules to allow quarterly profit recognition in CET1 subject to review and dividend adjustment
The Reserve Bank of India has amended payments bank capital adequacy rules to allow inclusion of current-year profits in Common Equity Tier 1 capital for capital to risk weighted assets ratio calculations on a quarterly basis. Quarterly profit recognition is allowed only where financial statements are audited or subject to limited review, with eligible profit defined as net profit up to the relevant quarter minus 0.25 times the average dividend paid over the last three financial years multiplied by the quarter number, and any cumulative net loss fully deducted from CET1 capital.