The RBI issued Second Amendment Directions, 2026, revising Chapter IV on minimum capital requirements for operational risk under the Commercial Banks – Forthcoming Instructions Directions, 2025. The update refines risk measurement methodologies and reporting thresholds.
RBI Revises Operational Risk Capital Norms
The Reserve Bank of India has issued the Reserve Bank of India (Commercial Banks – Forthcoming Instructions) Second Amendment Directions, 2026, amending Chapter IV relating to Minimum Capital Requirements for Operational Risk. The revision follows a comprehensive review and is grounded in the supervisory powers under the Banking Regulation Act, 1949.
The amendment introduces updated parameters for computing operational risk capital, including enhanced categorization of loss events, revised scaling factors, and improved data aggregation standards. It also strengthens disclosures for technology-related risks and fraud incidents.
Legal and compliance departments in commercial banks must update their risk governance models and reporting frameworks to comply with the new norms. The changes reflect RBI’s focus on strengthening operational resilience in light of increasing digital banking transactions and cybersecurity threats. Proactive alignment is necessary to avoid supervisory action during audits and inspections.
Citations
- RBI (Commercial Banks – Forthcoming Instructions) Second Amendment Directions, 2026
