The Reserve Bank of India (RBI) has amended its capital adequacy norms for Urban Co-operative Banks (UCBs) and Regional Rural Banks (RRBs) with respect to loans covered under the Government-backed Emergency Credit Line Guarantee Scheme (ECLGS) 5.0.
Under the amendment, exposures guaranteed under ECLGS 5.0 will attract a zero percent risk weight on 75% of the guaranteed portion, provided the settlement amount is expected to be received within 30 days from the date of guarantee invocation.
The remaining exposure will continue to attract risk weight as per existing prudential norms.
The RBI has incorporated the change through amendments to the Reserve Bank of India (Urban Co-operative Banks – Prudential Norms on Capital Adequacy) Directions, 2025 and the Reserve Bank of India (Regional Rural Banks – Prudential Norms on Capital Adequacy) Directions, 2025.
According to the RBI, the amendment follows the Government of India’s ECLGS 5.0 scheme and the related circular issued by the National Credit Guarantee Trustee Company (NCGTC) on May 8, 2026.
The revised directions have come into force with immediate effect.
