RBI Policy
To review inclusion of quarterly profit norms in CRAR calculation
This story was originally published at 12:54 IST on 8 April 2026
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MUMBAI – The Reserve Bank of India has proposed to review the guidelines on inclusion of quarterly profits in capital to risk-weighted assets ratio computation, the RBI said in its statement on developmental and regulatory policies.
Under the current guidelines, commercial banks can include quarterly net profits in their capital to risk-weighted assets ratio calculation given that the incremental provisions--made for non-performing assets at the end of any of the four quarters of the previous financial year--have not deviated more than 25% of the average of the four quarters.
The Reserve Bank of India has proposed to scrap this condition. The draft amendment directions in this regard will be issued for public comments shortly, the RBI said.
"It is proposed to remove the condition regarding NPA provisioning for inclusion of quarterly profits in CRAR computation," said Sanjay Malhotra, the central bank's governor. "The system-level financial parameters related to capital adequacy, liquidity, asset quality and profitability of banks continue to remain healthy." End
Reported by Vaishai Tyagi
Edited by Akul Nishant Akhoury
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