[CLSTR]
< Back to situation

[REVISION HISTORY]

Reserve Bank of India banking regulations

Updated 2 times since CLSTR started tracking revisions of this situation.

What changed

2026-10-12 05:52 UTC → 2026-10-23 19:22 UTC · added removed

The Reserve Bank of India (RBI) has implemented a series of regulatory changes affecting bank shareholding, liquidity, and foreign exchange management. Initially, To simplify shareholding, the RBI eased shareholding rules for eligible institutional investors, such as including mutual funds and funds, insurance companies. companies, and pension funds. Under the new amended framework, these entities can seek a one-time approval for subsequent acquisitions of up to 10 per cent of a bank’s paid-up share capital or voting rights, removing rights. This removes the previous requirement to obtain fresh approval if holdings had previously dropped below 5 per cent. These changes apply to commercial, small finance, payments, and local area banks. While subsequent acquisitions are streamlined, prior approval remains mandatory for initial major stakes, and investors must report holdings to the RBI if they cross the 5 per cent threshold. To manage liquidity and mitigate rupee volatility, the RBI has tightened several requirements. The central bank increased the minimum daily Cash Reserve Ratio (CRR) maintenance requirement for scheduled banks from 90% to 99%. While the statutory CRR remains at 3 per cent, this adjustment is expected to withdraw between ₹400 billion and ₹800 billion from the banking system, potentially increasing bank funding costs by 1-2 basis points. Further measures have been introduced to system. To curb speculative positions and manage foreign exchange risk. The positions, the RBI lowered the threshold for undertaking foreign exchange derivative transactions without established underlying exposure from $100 million to $5 million and million, prohibited the rebooking of cancelled rupee-linked foreign exchange derivative contracts. Additionally, the central bank contracts, and introduced a Foreign Exchange Risk Reserve (FERR), which requires authorized dealers to maintain cash reserves with the RBI equivalent to (FERR) requiring a 20 per cent of the rupee value of cash reserve for certain rupee-linked derivative contracts exceeding $2 million. Additionally, the RBI issued new directions to align leverage-ratio norms with 2017 Basel Committee standards. Effective April 1, 2027, minimum leverage ratios will be set at 4% for domestic systemically important banks (D-SIBs) and 3.5% for other banks.

Versions

  1. 2026-10-23 19:22 UTC Reserve Bank of India banking regulations
  2. 2026-10-12 05:52 UTC Reserve Bank of India banking regulations
  3. 2026-10-11 09:03 UTC Reserve Bank of India banking regulations

Only revisions since CLSTR began indexing content versions appear here. Select a version to see what changed compared to the one before it.