meta_id 2955575

On March 10, 2026, the Reserve Bank of India (RBI) issued the Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Second Amendment Directions, 2026, amending the Master Direction issued on November 28, 2025. The amendment revises the definition of Tier 1 capital used for compliance with credit and investment concentration norms applicable to non-banking financial companies (NBFCs). The RBI modified the definitions of "Owned Fund" and "Tier 1 capital" to align with Chapter II of the Reserve Bank of India (Non-Banking Financial Companies – Prudential Norms on Capital Adequacy) Directions, 2025. Under the amended directions, NBFCs must obtain an external auditor's certificate upon completion of capital augmentation and submit it to the RBI's Department of Supervision before recognising additions to capital funds for concentration norm compliance purposes. The amendment introduces two new paragraphs specifying that applicable Tier 1 capital for compliance with concentration norms shall be determined based on the NBFC's latest available financial statements, whether audited or subject to limited review. The term "Tier 1 capital" is defined in paragraph 10 of the Capital Adequacy Directions, 2025. The Second Amendment Directions came into force with immediate effect from March 10, 2026. All NBFCs must ensure compliance with the revised definitions and procedural requirements for capital augmentation certification and submission to the RBI. REFERENCES: Reserve Bank of India. Reserve Bank of India (Non-Banking Financial Companies - Concentration Risk Management) Second Amendment Directions, 2026. RBI/2025-26/227 DOR.CAP.REC.No.417/21.01.002/2025-26. March 10, 2026. Available at: https://www.rbi.org.in/