The Reserve Bank of India has issued the sixth amendment to its 2025 capital adequacy directions for small finance banks, changing the prudential treatment of exposures covered by the Emergency Credit Line Guarantee Scheme 5.0. Under the amendment, these exposures will attract a zero percent risk weight to the extent of 75 percent of the guaranteed portion, where the settlement amount is expected to be received within 30 days from the date of invocation. Any remaining exposure will continue to attract risk weight under the existing guidelines. The change follows the National Credit Guarantee Trustee Company circular on ECLGS 5.0 issued on May 08, 2026, and takes effect immediately.
Reserve Bank of India2026-06-16
Reserve Bank of India gives zero risk weight to 75 percent of guaranteed ECLGS 5.0 exposures for small finance banks
The Reserve Bank of India has amended capital adequacy rules for small finance banks to give a zero percent risk weight to part of exposures guaranteed under ECLGS 5.0. The treatment applies to 75 percent of the guaranteed portion where settlement is expected within 30 days of invocation, while the rest remains subject to existing risk-weight rules. The amendment is effective immediately.