The Reserve Bank of India (RBI) has issued amendments to the Reserve Bank of India (Commercial Banks -Financial Statements: Presentation and Disclosures) Directions, 2025, pursuant to a regulatory review and following the issuance of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026. These amendments have been made in exercise of the powers conferred under Sections 21 and 35A of the Banking Regulation Act, 1949, with the objective of aligning financial statement disclosures with the revised credit facility framework and strengthening transparency in capital market exposures.
The amendment specifically modifies Paragraph 10(5) under Chapter III, which deals with “Disclosure in Financial Statements – Notes to Accounts.” Sub-paragraph 10(5)(ii) has been deleted. In its place, a new sub-paragraph 10(5)(iia) titled “Exposure to Capital Markets” has been inserted, requiring banks to provide a detailed tabular disclosure of such exposures in their financial statements.
Under the revised framework, banks must disclose their capital market exposures in rupees crore for both the current and previous financial years. The disclosure must comprehensively capture various categories of exposure. These include direct investments in equity and preference shares, convertible bonds and debentures, units of non-debt mutual fund schemes, units of REITs and InvITs, and units of Alternative Investment Funds (AIFs). Advances extended to individuals for investment in shares (including IPOs, FPOs, and ESOPs) and related instruments must also be reported.
Further, banks are required to disclose advances where capital market instruments are taken as primary security or collateral, including cases where lending is extended primarily on the strength of such collateral. All credit facilities to Capital Market Intermediaries (CMIs) must be included. The disclosure also covers acquisition finance, including portions extended by overseas branches of Indian banks and bridge finance provided to meet the acquiring company’s own funds requirement.
Additional categories include financing to non-debt mutual fund schemes, bridge finance for equity contributions to newly set-up companies, underwriting commitments in primary issuances linked to acquisition finance, irrevocable payment commitments issued by custodian banks to clearing corporations, and trade exposures arising from clearing member activities in equity and commodity derivatives.
The total exposure to capital markets must be computed in accordance with the Reserve Bank of India (Commercial Banks – Concentration Risk Management) Directions, 2025, read together with the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025.
These amendments will come into effect from the date a bank adopts the 2026 Credit Facilities Amendment Directions or April 1, 2026, whichever is earlier.
