In its Press Release dated April 8, 2026, the Reserve Bank of India (RBI) outlined a series of significant developmental and regulatory policy measures aimed at enhancing efficiency, reducing compliance burdens, and strengthening the financial ecosystem.
Below is a structured overview of the key announcements:
I. Banking Regulation
1. Relaxation in CRAR Computation Norms
The RBI has proposed a review of guidelines governing the inclusion of quarterly profits in the computation of Capital to Risk-weighted Assets Ratio (CRAR) for commercial banks.
Under existing norms, banks (excluding Regional Rural Banks and Local Area Banks) can include quarterly net profits in CRAR calculations only if incremental provisions for Non-Performing Assets (NPAs) do not deviate by more than 25% from the average of the previous four quarters.
Proposed Change:
The RBI plans to remove this deviation condition, thereby simplifying capital computation and offering greater flexibility to banks. Draft amendment directions will be issued shortly for public comments.
2. Removal of Investment Fluctuation Reserve (IFR) Requirement
Currently, banks maintain an Investment Fluctuation Reserve (IFR) as a buffer against mark-to-market (MTM) losses in their investment portfolios.
Proposed Change:
The RBI has proposed to dispense with the IFR requirement for commercial banks (excluding Small Finance Banks, Payment Banks, and Regional Rural Banks), considering that:
- Banks already maintain capital for market risk
- Revised investment classification and valuation norms are in place
Additionally, guidelines for other bank categories will be revised to address operational challenges and ensure regulatory harmonisation. Draft directions will follow for consultation.
3. Rationalisation of Board-Level Agenda Requirements
The RBI has undertaken a comprehensive review of instructions regarding matters to be placed before bank boards.
Objective:
- Improve board efficiency
- Enable deeper focus on strategy and risk governance
- Reduce procedural overload
Draft guidelines reflecting this rationalisation will be released for public feedback.
II. Supervision
4. Consolidation of Supervisory Instructions
As part of its ongoing efforts to streamline regulatory frameworks, the RBI has extended its consolidation exercise to supervisory instructions.
- In 2025, over 9,000 regulatory circulars were consolidated into 238 Master Directions.
- Now, 64 draft Master Directions covering up to nine functional areas of supervision have been released.
This move is expected to:
- Improve clarity
- Reduce compliance complexity
- Enhance accessibility of regulatory guidance
III. Payment Systems
5. Easier Onboarding for MSMEs on TReDS
The Trade Receivables Discounting System (TReDS) platform plays a crucial role in enabling MSMEs to access working capital.
Proposed Change:
The RBI has proposed to eliminate the due diligence requirement for MSMEs during onboarding on TReDS platforms.
Impact:
- Faster onboarding
- Improved ease of doing business
- Greater participation from MSMEs
A broader review of TReDS guidelines is also underway, with draft directions expected soon.
IV. Financial Markets
6. Expanding the Term Money Market
To deepen liquidity and improve monetary policy transmission, the RBI has announced key reforms in the term money market.
Key Changes:
- Expansion of participant base to include:
- All-India Financial Institutions (AIFIs)
- Non-Banking Financial Companies (NBFCs)
- Housing Finance Companies
- Corporates
- Increased borrowing limits for standalone primary dealers
These measures aim to strengthen the link between short-term and long-term interest rates while broadening market participation.
Conclusion
The RBI’s latest policy announcements reflect a clear intent to simplify regulations, enhance operational flexibility, and deepen financial markets. By removing legacy constraints such as the IFR requirement and easing compliance norms, the central bank is aligning the regulatory framework with evolving market realities.
As draft directions are released for consultation, stakeholders will have an opportunity to shape the final contours of these reforms—making this a pivotal phase for India’s banking and financial sector.
