The RBI Circulars issued in 2026 introduce important regulatory updates for banks, NBFCs, Housing Finance Companies (HFCs), Core Investment Companies (CICs), and other financial institutions. For RBI Grade B, CAIIB, JAIIB, and other banking exam aspirants, these updates are very important as they are often asked in exams, especially from topics like banking regulations, capital adequacy, and dividend policies.
For aspirants, these circulars are not just theory but also important exam-focused topics. Questions are commonly asked from areas like capital funds, CET1 ratio, adjusted profit after tax, and dividend payout rules. A clear understanding of these updates is essential for better performance in regulatory exams. In this blog, we explain the key RBI Circulars of 2026, their impact, and how you can download them in PDF format.
Download RBI Circulars Practice Quiz
Download the RBI Circulars Practice Quiz PDF, which includes 100 important questions along with key RBI circular updates for Phase 1 and Phase 2 exams. Go through these circulars and practice the questions to better understand the latest regulatory updates issued by the Reserve Bank of India. This will help you strengthen your preparation and stay updated with important changes for upcoming banking exams.
| Particulars | Link |
| RBI Circulars Questions with Answers | Download Free PDF |
| RBI Circulars for Phase 1 Exam | Download PDF |
| RBI April 2026 Circular | Check Details |
| RBI March 2026 Circular | Check Details |
Attempt RBI Circulars Practice Quiz
Attempt the RBI Circulars Practice Quiz to test your understanding of key regulatory updates, banking norms, and RBI guidelines essential for competitive exams.
1. Under RBI’s Scale Based Regulation, which category of NBFC is exempt from mandatory RBI registration?
2. What is the key asset size threshold for NBFC exemption from RBI registration under the updated Scale Based Regulation?
3. Which of the following is NOT included in the definition of ‘public funds’ for NBFC classification purposes?
4. Company A borrows funds from a bank and then lends them to its NBFC subsidiary. How does RBI treat this arrangement?
5. Under the group structure rule for NBFCs, when are all NBFCs in a group required to register with RBI?
6. What is the deadline for existing NBFCs to surrender their registration under RBI’s updated framework?
7. Which of the following activities requires RBI approval for an unregistered Type 1 NBFC?
8. What is the primary regulatory objective behind RBI’s introduction of the NBFC exemption framework?
9. What is the full form of GRN in the context of RBI’s FEMA guarantee reporting framework?
10. Which GRN form must be submitted when the terms or amount of a foreign exchange guarantee changes?
11. In the FEMA guarantee reporting structure, when is a GRN Invocation form required to be filed?
12. What is a currency chest in the context of RBI’s currency management framework?
13. What is the minimum transaction amount applicable for currency chest transactions?
14. After the minimum transaction threshold for currency chest operations, subsequent transactions must be in multiples of:
15. On which portal must currency chest transactions be reported as per RBI guidelines?
16. What is the deadline for reporting currency chest transactions on the CYMCC portal?
17. What is the penalty for a reporting delay or mismatch in currency chest transaction reporting?
18. What is the daily penalty imposed if an ATM remains cash-out for more than 10 hours?
19. What penalty does a bank face if a counterfeit note is detected in its ATM?
20. As per RBI’s counterfeit note detection rules, which method of verification is mandatory for banknotes?
Quiz Summary
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1. Under the RBI 2026 circular, what is the formula for Adjusted Profit After Tax (APAT) used in dividend eligibility calculation for banks?
2. A bank has a CET1 ratio of 13.5%. According to the RBI 2026 dividend payout slabs, what is the maximum percentage of APAT it can distribute as dividend?
3. Which of the following items is explicitly EXCLUDED from profit calculation for dividend declaration purposes under RBI 2026 circulars?
4. Under RBI 2026 NBFC prudential norms, which of the following is a condition for inclusion of quarterly profit in ‘owned funds’?
5. An NBFC reports quarterly profit of ₹500 crore. The average dividend paid over the last 3 years is ₹200 crore annually. What is the adjusted quarterly profit eligible for inclusion in owned funds under RBI 2026 norms?
6. What is the maximum dividend payout limit set by RBI 2026 norms as a percentage of Profit After Tax (PAT), irrespective of the CET1 ratio?
7. A Right of Use (ROU) asset arising from lease accounting under RBI 2026 circular norms — how is it treated in the calculation of ‘owned funds’ for NBFCs?
8. Under RBI 2026 concentration risk norms for NBFCs, what document must an NBFC obtain before using newly added capital for computing exposure limits?
9. Which of the following financial institutions are covered under the uniformly applied quarterly profit inclusion norms introduced in the RBI 2026 circulars?
10. A bank has PAT of ₹10,000 crore and Net NPA of ₹200 crore. Calculate the APAT and the maximum dividend permissible if CET1 is 15.5%.
11. Under RBI 2026 norms, what is the treatment of ‘excess provision reversal’ in the computation of APAT for dividend declaration?
12. Bank ABC has a CET1 ratio of 7.5%. What is its dividend payout capacity under the RBI 2026 CET1-based dividend slabs?
13. Which of the following best describes the purpose of introducing the ‘Adjusted Profit After Tax (APAT)’ concept in RBI 2026 dividend norms?
14. Under RBI 2026, which category of income is NOT to be included in profit calculation for dividend purposes?
15. A Domestic Systemically Important Bank (DSIB) must maintain which of the following additional capital requirements beyond normal CET1 norms under RBI 2026 regulations?
16. Under the RBI 2026 NBFC amendment, how should current year losses be treated before adding quarterly profit to owned funds?
17. What was the key change in the treatment of ‘free reserves’ under the RBI 2026 NBFC capital adequacy amendment compared to the old rule?
18. A foreign bank branch in India wishes to remit profits to its head office. Under RBI 2026 rules, which of the following conditions must be met?
19. What happens if a foreign bank branch remits excess profit to its head office under RBI 2026 norms?
20. Under RBI 2026 dividend norms, which of the following regulatory conditions must a bank satisfy before declaring any dividend?
21. Case Study: XYZ Bank has the following financials for FY 2025-26: PAT = ₹8,000 crore; Net NPA = ₹400 crore; CET1 ratio = 16.5%. The Board wants to declare maximum dividend. What is the maximum permissible dividend amount? Given information: (i) PAT = ₹8,000 crore (ii) Net NPA = ₹400 crore (iii) CET1 ratio = 16.5% (iv) CET1 slab 16%–17% allows 60% of APAT (v) 75% PAT cap applies
22. Under RBI 2026, which of the following correctly explains why a bank’s Board must review NPA divergence before declaring dividend?
23. Which of the following is the primary objective of the RBI 2026 concentration risk management amendment requiring an external auditor certificate for capital additions in NBFCs?
24. Under RBI 2026 norms, which authority must receive the external auditor certificate related to concentration risk capital additions in NBFCs?
25. Under RBI 2026 dividend norms, unrealised gains from which category of financial instruments are explicitly excluded from dividend calculation?
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What are RBI Circulars 2026 and why are they important?
RBI Circulars 2026 are important regulatory updates to guide banks and non-banking financial institutions. These circulars explain key changes in areas such as capital adequacy norms, profit calculation methods, dividend distribution rules, and risk management frameworks. They help ensure that financial institutions follow updated rules and maintain stability in the banking system.
- They are directly linked to regulatory frameworks like Basel norms and capital adequacy ratios
- Questions are frequently asked in RBI Grade B and other banking exams
- They test conceptual clarity on financial stability mechanisms
- They connect theory with real-time banking regulations
Key focus areas of RBI Circulars 2026
The RBI Circulars 2026 aim to improve India’s banking system through updated guidelines, stronger risk management, and better digital banking services. These updates focus on financial stability, regulatory compliance, customer protection, and the safe use of new financial technologies, in line with global banking standards.
| Area | Focus of RBI 2026 Updates |
| Capital Adequacy | Inclusion of quarterly profit in owned funds |
| Risk Management | External auditor certification for capital additions |
| Dividend Policy | CET1-based dividend payout limits |
| Profit Calculation | Adjusted Profit After Tax (APAT) introduction |
| Financial Reporting | Strict reporting timelines and exclusions |
Know more about RBI Circulars 2026
RBI Latest Circulars
Below is the list of RBI Latest Circulars that has been released in 2026 till now, check it out.
| RBI Circulars Release Date | RBI Latest Circulars | RBI Circulars PDFs |
| March 10, 2026 | Reserve Bank of India (Local Area Banks – Prudential Norms on Declaration of Dividends) | Download Now |
| October 23,2025 | Implementation of Section 51A of UAPA,1967 | Download Now |
| October 14, 2025 | Reserve Bank of India (Trade Relief Measures) Directions, 2025 | Download Now |
| October 9, 2025 | Implementation of Section 51A of UAPA,1967 | Download Now |
| August 25, 2025 | Implementation of Section 51A of UAPA, 1967 | Download Now |
| June 24, 2025 | Foreign Exchange Management Regulations, 2025 | Download Now |
| June 6, 2025 | Standing Liquidity Facility for Primary Dealers | Download Now |
| June 1, 2025 | Withdrawal of ₹2000 Denomination Banknotes | Download Now |
| May 23, 2025 | Issuance of Partly Paid Units by Investment Vehicles | Download Now |
| April 01, 2025 | Exposure Norms and Statutory / Other Restrictions | Download Now |
| April 01, 2025 | Facility for Exchange of Notes and Coins | Download Now |
| March 17, 2025 | Asian Clearing Union (ACU) Mechanism | Download Now |
| February 07, 2025 | Standing Liquidity Facility for Primary Dealers | Download Now |
| January 20, 2025 | Guidelines on Settlement of Dues of borrowers by ARCs | Download Now |
What are the important RBI circular topics covered in April 2026?
April 2026 included several major updates related to NBFC regulation, counterfeit notes, currency chest management, savings bonds, FEMA reporting, and banking operations. These topics are highly relevant from the examination perspective.
| Topic | Key Focus Area |
| NBFC Registration Exemption Framework | Unregistered Type 1 NBFC |
| Scale Based Regulation | Low-risk NBFC compliance |
| Public Funds Concept | Direct and indirect public funding |
| Currency Chest Guidelines | Incentives and penalties |
| Clean Note Policy | Quality currency circulation |
| Counterfeit Note Detection | Machine-based authentication |
| FEMA Guarantee Reporting | GRN Forms |
| Floating Rate Savings Bonds 2020 | Interest reset mechanism |
| NDS-OM Access Criteria | PRAVAA Portal |
| AgriSURE Fund | Rural and agri startup support |
What topics are covered in RBI Circulars March 2026?
The March 2026 RBI circulars include a mix of capital market regulation, banking exposure rules, and financial market infrastructure updates. These circulars are important because they define how banks and financial institutions interact with markets in a controlled and risk-managed environment. Most importantly, these updates regulate how banks invest, lend, and participate in capital markets, ensuring systemic stability and transparency in the financial system.
| Topic | Key Concept |
| Capital Market Exposure | 40% total limit of eligible capital base |
| Direct Exposure | Maximum 20% of capital base |
| Acquisition Finance | 20% within overall exposure |
| LEI (Legal Entity Identifier) | 20-character global entity code |
| UTI (Unique Transaction Identifier) | Tracks OTC derivative transactions |
| Collateral norms | 50% requirement with 25% cash |
| Haircut on equity | 40% reduction in collateral value |
| Central Counterparty (CCP) | Intermediary in financial transactions |
| Electronic Trading Platform (ETP) | Digital trading system |
What are the key NBFC prudential norms changes in RBI Circular 2026?
The RBI 2026 circular, brings important changes in the NBFC Prudential Norms on Capital Adequacy. It mainly focuses on redefining “owned funds” and improving capital transparency. A key update is the inclusion of quarterly profits in owned funds, subject to certain conditions. This helps NBFCs show a more accurate capital position while maintaining financial discipline.
| Component | Old Rule | RBI 2026 Update |
| Owned Funds | Annual profit considered | Quarterly profit included |
| Free Reserves | Limited inclusion | Expanded inclusion with conditions |
| Loss Adjustment | Deducted annually | Deducted immediately from owned funds |
| Dividend Adjustment | Not structured | 3-year average dividend rule introduced |
How is quarterly profit included in owned funds under RBI 2026 rules?
One of the most important changes in the RBI 2026 circular is the inclusion of quarterly profits in owned funds. This applies to NBFCs, HFCs, CICs, and similar regulated entities. However, this inclusion is not automatic. RBI has introduced strict conditions to ensure accuracy and financial discipline.
| Condition | Explanation |
| Statutory Audit / Limited Review | Quarterly financials must be reviewed or audited by statutory auditor |
| Dividend Adjustment | Average dividend of last 3 years must be adjusted |
| Quarterly Proportion | Dividend adjusted on quarterly basis (0.25 factor applied) |
| Loss Deduction | Current year losses must be fully deducted first |
Formula concept (simplified)
Adjusted Quarterly Profit = Quarterly Profit
− (0.25 × Average Dividend of Last 3 Years)
Important explanation
- The factor 0.25 is used because profit is quarterly (1/4 of a year)
- Dividend history ensures realistic profit reporting
- Audit requirement ensures authenticity of numbers
- Losses are deducted first to avoid overstatement
This rule ensures that institutions do not artificially inflate their capital position using unverified profits.
What is concentration risk management amendment in NBFC rules?
The RBI 2026 circular also introduces changes in concentration risk management for NBFCs. This update ensures that capital expansion is properly verified before being used for exposure calculations.
| Aspect | Details |
| External Audit Requirement | NBFCs must obtain an external auditor certificate for any capital additions before using it for regulatory purposes |
| Use of New Capital | Newly added capital cannot be immediately used for increasing exposure limits without verification |
| Submission Requirement | The auditor certificate must be submitted to the Reserve Bank of India’s Department of Supervision |
| Objective | To prevent misuse of capital, ensure accurate exposure limits, and strengthen risk monitoring |
| Impact on Capital Increase | Capital additions require independent verification before regulatory recognition |
| Impact on Exposure Limits | Delayed usage of new capital for calculating or expanding exposure limits |
| Impact on Risk Control | Strengthens supervisory oversight and improves concentration risk management framework |
How do HFC, CIC, ARC and other entities align with NBFC capital adequacy changes?
The RBI has ensured uniformity across different financial institutions such as:
- Housing Finance Companies (HFCs)
- Core Investment Companies (CICs)
- Asset Reconstruction Companies (ARC)
- Mortgage Guarantee Companies
- Standalone Primary Dealers
Common changes across all institutions
These changes apply uniformly across regulated entities to ensure consistency in capital computation, profit recognition, and financial reporting standards.
| Rule | Application |
| Quarterly Profit Inclusion | Allowed with same conditions as NBFC |
| Loss Deduction | Mandatory before adding profit |
| Dividend Adjustment | Required using 3-year average |
| Statutory Audit | Mandatory for validation |
| Right of Use Asset | Not deducted from owned funds |
Special highlight: Right of Use (ROU) asset
The Right of Use (ROU) asset treatment has been specifically clarified under the 2026 circular to ensure uniform accounting interpretation across institutions.
- ROU asset arises from lease accounting framework
- It is not deducted from owned funds while calculating capital
- Although intangible in nature, it is linked to underlying leased tangible assets
- This clarification removes ambiguity in capital adequacy computations in 2026 regulatory norms
What are RBI 2026 dividend declaration norms for banks?
One of the most important sections of RBI Circular 2026 is related to dividend declaration norms for banks. These rules ensure that banks do not distribute excessive profits and maintain strong capital buffers.
Banks must calculate dividend eligibility based on:
- Profit After Tax (PAT)
- Adjusted Profit After Tax (APAT)
- CET1 capital ratio
Key concept: Adjusted Profit After Tax (APAT)
Adjusted PAT = Profit After Tax − (50% of Net NPA)
This ensures that dividend distribution is restricted when asset quality is weak.
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How is Adjusted Profit After Tax calculated under RBI rules?
Adjusted PAT is a critical concept introduced for dividend control.
| Step | Description |
| Step 1 | Calculate Profit After Tax (PAT) |
| Step 2 | Identify Net NPA |
| Step 3 | Take 50% of Net NPA |
| Step 4 | Deduct from PAT |
Example
- PAT = ₹10,000 crore
- Net NPA = ₹200 crore
- 50% of NPA = ₹100 crore
Adjusted PAT = 10,000 − 100 = ₹9,900 crore
Purpose of APAT
- Prevent dividend distribution during weak asset quality
- Ensure prudential financial management
- Protect depositor and system stability
What are eligibility conditions for dividend declaration?
Banks must satisfy strict eligibility conditions before declaring dividends.
| Condition | Requirement |
| Capital Adequacy | Must meet minimum CAR norms |
| Adjusted Profit | Must be positive APAT |
| Regulatory Compliance | No restrictions from RBI |
| Auditor Opinion | No adverse or highly qualified report |
| Future Capital Plan | Should not affect expansion plans |
How does CET1 ratio determine dividend payout under RBI 2026 norms?
CET1 (Common Equity Tier 1) capital plays a major role in determining dividend payout capacity.
| CET1 Ratio | Dividend Allowed |
| Up to 8% | 0% |
| 8% – 10% | 20% of APAT |
| 10% – 12% | 30% of APAT |
| 12% – 14% | 40% of APAT |
| 14% – 16% | 50% of APAT |
| 16% – 17% | 60% of APAT |
| 17% – 18% | 70% of APAT |
| Above 20% | 100% of APAT |
Interpretation:
- Higher CET1 = higher dividend capacity
- Lower CET1 = restricted payout
- Ensures capital safety first approach
What is the 75% PAT rule and DSIB buffer requirement?
Apart from CET1-based limits, RBI has also introduced an overall cap.
75% PAT rule
The 75% PAT rule limits dividend distribution by banks to ensure adequate capital retention and financial stability under regulatory norms.
- Dividend cap: Total dividend cannot exceed 75% of Profit After Tax (PAT) ensuring controlled payout policy
- Mandatory limit: Even if Capital to Risk-weighted Assets Ratio (CET1/CRAR) permits higher payout, this 75% cap remains compulsory
- Objective: Ensures banks retain sufficient internal capital for growth, risk absorption, and compliance with prudential norms issued by the Reserve Bank of India
DSIB (Domestic Systemically Important Banks) buffer
DSIB banks are systemically important institutions that require higher capital buffers to reduce systemic risk and maintain financial stability.
- Base CET1 requirement: Minimum 8% Common Equity Tier 1 capital to ensure strong core capital base
- Capital Conservation Buffer: Additional 2.5% buffer to absorb financial stress and maintain stability during downturns
- Additional DSIB buffer: Extra capital requirement prescribed by the Reserve Bank of India based on systemic importance
- Total requirement: Overall capital adequacy is higher than normal banks due to systemic risk exposure and importance
- Objective: Strengthens financial system stability and enhances loss-absorbing capacity of large banks
Key takeaway
DSIB banks operate under stricter capital and dividend norms to ensure stronger financial resilience and reduce systemic risk in the banking system.
- Higher capital requirement ensures stronger financial resilience and stability
- Dividend payout is strictly regulated to preserve capital buffers
- Systemic importance leads to enhanced supervision and tighter regulatory control by the Reserve Bank of India
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What items are excluded from dividend calculation under RBI 2026 rules?
RBI clearly excludes certain items from dividend computation to ensure realistic profit distribution.
| Item | Reason |
| Exceptional Income | Non-recurring in nature |
| Sale of Assets | One-time gain |
| Level 3 Financial Instruments | Illiquid valuation gains |
| Unrealised Gains | Not actual cash profit |
| Excess Provision Reversal | Requires regulatory approval |
What are remittance of profit rules for foreign banks in India?
Foreign banks operating in India through branches are allowed to remit profits to their head offices, subject to conditions.
| Aspect | Details |
| Account Requirement | Accounts must be properly audited before remittance |
| Source of Profit | Profit must arise from normal banking operations only |
| Regulatory Eligibility | Institution must meet all applicable regulatory eligibility norms |
| RBI Approval | Not required if all prescribed conditions are satisfied |
| Excess Remittance | Any excess amount remitted must be returned immediately |
| Reporting Requirement | Mandatory reporting/submission to the Reserve Bank of India |
| Regulatory Treatment | Remittance is treated similarly to dividend distribution under regulatory norms |
FAQs
RBI Circulars 2025-26 are crucial for RBI Grade B exam preparation as they contain the latest regulatory guidelines, policies, and updates in the banking and financial sector, which are frequently asked in the exam’s current affairs and economic and social issues sections.
You can find all the latest RBI Circulars 2026 on the official website of RBI under Notifications section.
We have got it covered for free. On our Oliveboard Regulatory Youtube Channel, our faculty Lakshmi Mam comes up with these sessions on a regular basis for free.
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