Banking and RBI
RBI amends capital adequacy norms: quarterly profits can count in CET1 without the NPA provisioning condition
8 May 2026 | Reserve Bank of India press release
On 8 May 2026 the RBI released three Amendment Directions on the inclusion of quarterly profits in Common Equity Tier 1 (CET1) capital for computing the Capital to Risk-weighted Assets Ratio (CRAR) of banks, including the Commercial Banks (Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026. Drafts had been issued on 8 April 2026.
Earlier, commercial banks (excluding Local Area Banks and Regional Rural Banks) could count current-year profits quarterly only if incremental NPA provisions in any of the four quarters of the previous year had not deviated more than 25 per cent from the four-quarter average. That qualifying condition is removed. Under the amended text, the financial statements must be audited or subject to limited review each quarter, and eligible profit is computed as EP(t) = NP(t) - 0.25 x D x t, where D is the average dividend paid in the last three financial years; cumulative net losses are fully deducted.
Key facts- Issued: 8 May 2026 (drafts 8 April 2026)
- Change: NPA-based qualifying condition removed
- Condition: quarterly accounts audited or limited review
- Formula: EP(t) = NP(t) - 0.25 x D x t (D = average dividend of last three years)
Exam takeaway: CET1 is the highest-quality regulatory capital of a bank, and CRAR measures capital against risk-weighted assets.
Quick revision: RBI 8 May 2026: quarterly profits count in CET1 without the 25% NPA-provision test; EP = NP - 0.25 x D x t.
Reserve Bank of India press release original sourceBanking and RBI
RBI imposes Rs 31.80 lakh penalty on Yes Bank for KYC non-compliance
8 May 2026 | Reserve Bank of India press release
The RBI said on 8 May 2026 that, by an order dated 27 April 2026, it imposed a monetary penalty of Rs 31.80 lakh on Yes Bank Limited for non-compliance with certain RBI directions on Know Your Customer (KYC). The penalty was imposed under Section 47A(1)(c) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
The charge sustained was that the bank failed to put in place a system of using the KYC Identifier assigned by the Central KYC Records Registry for establishing an account-based relationship with customers. The finding arose from the statutory inspection with reference to the bank's financial position as on 31 March 2025. The RBI said the action is based on regulatory deficiencies and does not pronounce on the validity of any transaction with customers.
Key facts- Penalty: Rs 31.80 lakh on Yes Bank Limited
- Order date: 27 April 2026; announced 8 May 2026
- Law: Section 47A(1)(c) with Section 46(4)(i), Banking Regulation Act, 1949
- Issue: KYC Identifier from Central KYC Records Registry not used
Exam takeaway: The RBI's penalty notices state that they reflect regulatory deficiencies, not a judgement on customer transactions.
Quick revision: RBI fines Yes Bank Rs 31.80 lakh for KYC Identifier non-use (order 27 Apr, press release 8 May 2026).
Reserve Bank of India press release original sourceAppointments, Awards and Important Days
Ashok Lahiri takes charge as Vice Chairman of NITI Aayog
8 May 2026 | The Hindu BusinessLine (PTI)
Economist Ashok Kumar Lahiri took charge as Vice Chairman of NITI Aayog on Friday, 8 May 2026, replacing Suman Bery, The Hindu BusinessLine reported citing PTI. Lahiri is a former Chief Economic Adviser to the Government of India and a member of the 15th Finance Commission.
NITI Aayog said on X that his experience in academia, public institutions and international organisations will strengthen its efforts towards evidence-based policymaking. His appointment was reported in the 24 and 25 April editions.
Key facts- Post: Vice Chairman, NITI Aayog
- Took charge: 8 May 2026
- Predecessor: Suman Bery
- Background: former Chief Economic Adviser; member, 15th Finance Commission
Exam takeaway: NITI Aayog replaced the Planning Commission and serves as the government's policy think tank.
Quick revision: Ashok Lahiri took charge as NITI Aayog Vice Chairman on 8 May 2026, replacing Suman Bery (PTI).
The Hindu BusinessLine (PTI) original source