RBI revises Asset Liability Management norms for Small Finance Banks: key changes to LCR and NSFR disclosures

The Reserve Bank of India has issued the Reserve Bank of India (Small Finance Banks – Asset Liability Management) Amendment Directions, 2026, dated July 30, 2026, to refine the regulatory framework for Small Finance Banks (SFBs). These Amendment Directions update the existing Reserve Bank of India (Small Finance Banks – Asset Liability Management) Directions, 2025, with a focused objective: to streamline disclosure requirements relating to the Liquidity Coverage Ratio (LCR) and Net Stable Funding Ratio (NSFR).

The amendments are closely linked to the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026, which address Basel Pillar 3 disclosures. In effect, the RBI has decided that SFBs should no longer look to the Asset Liability Management (ALM) framework for detailed LCR and NSFR disclosure formats. Instead, SFBs must now rely on two core disclosure-related Directions for these templates and instructions:

  • Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) Directions, 2025
  • Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Directions, 2025

These consolidated requirements will apply from 1 April 2027, giving Small Finance Banks a clear implementation timeline to realign internal policies, systems, and reporting processes.

Statutory authority for the amendment

The Amendment Directions are issued under the Banking Regulation Act, 1949, specifically in exercise of powers under:

  • section 35A of the Banking Regulation Act, 1949, and
  • all other enabling provisions empowering the Reserve Bank of India in this area.

The RBI has recorded its satisfaction that modifying the disclosure framework for Small Finance Banks is necessary and expedient in the public interest, a standard requirement whenever such regulatory Directions are changed.

Linkage with Basel Pillar 3 and prudential norms

The backdrop to this amendment is the issuance of the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026, which deal with Basel Pillar 3 disclosures. Basel Pillar 3 focuses on market discipline through enhanced transparency and disclosure.

To avoid duplication or inconsistency across multiple sets of Directions, RBI has aligned the LCR and NSFR disclosure obligations under the ALM framework with the broader prudential and financial statement disclosure framework applicable to SFBs.