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The Reserve Bank of India (RBI) has issued the Small Finance Banks – Prudential Norms on Capital Adequacy Amendment Directions, 2025, enhancing the regulatory framework for small finance banks. This notification, dated December 4, 2025, revises existing prudential norms to further strengthen financial resilience within this segment of the banking sector. It modifies key provisions related to risk-weighted assets, including the deletion of certain paragraphs governing capital calculation, demonstrating RBI’s focus on aligning regulatory standards with the evolving banking landscape. These amendments, issued under the Banking Regulation Act of 1949, aim to improve risk management practices and ensure that small finance banks maintain adequate capital buffers to support sustainable growth and financial stability. The updated directions are set to come into effect from January 1, 2026, giving banks time to adapt to the changes