RBI updates CRR and SLR directions for Payments Banks: Key regulatory changes for 2026

The Reserve Bank of India has issued the Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026, bringing in a series of technical but important refinements to the existing liquidity framework for payments banks. These amendments, effective January 22, 2026, are primarily intended to synchronise the regulatory text with recent legislative and regulatory changes, and to sharpen the accuracy and transparency of liquidity reporting by payments banks.

This article explains the background, the exact nature of the amendments, and their practical implications for compliance teams and senior management of payments banks.

Regulatory background and context

Linkage with recent legislative changes

The 2026 amendments are a follow-up to significant statutory changes in the banking regulatory ecosystem, including:

  • Banking Laws (Amendment) Act, 2025
  • Banking Regulation (Companies) Amendment Rules, 2025
  • Reserve Bank of India Scheduled Banks’ (Amendment) Regulations 2025

These instruments were notified in the Gazette of India on:

  • December 10, 2025 (Banking Laws (Amendment) Act, 2025 and related rules)
  • January 15, 2026 (Reserve Bank of India Scheduled Banks’ (Amendment) Regulations 2025)

To ensure that the framework applicable to payments banks stays fully consistent with these legal changes, the RBI has now revised the earlier Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025 which were originally issued on November 28, 2025.

Statutory powers invoked by RBI

The Amendment Directions are issued by the RBI in exercise of its regulatory powers under, inter alia:

  • Section 35A of the Banking Regulation Act, 1949
  • Section 42 of the Reserve Bank of India Act, 1934
  • Sections 18 and 24 of the Banking Regulation Act, 1949

The RBI records that, in view of public interest and its statutory mandate, it considers these amendments necessary and expedient to ensure clarity and uniform implementation of CRR and SLR requirements for payments banks.

Note: The Amendment Directions are effective immediately from January 22, 2026, and payments banks must ensure prompt alignment of their reporting and internal systems with the revised framework.

Scope and title of the Amendment Directions

The updated instructions are formally titled:

“Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Amendment Directions, 2026”

They operate as a modifying instrument to the Reserve Bank of India (Payments Banks – Cash Reserve Ratio and Statutory Liquidity Ratio) Directions, 2025, and do not constitute a standalone code. Payments banks must therefore read the 2026 amendments together with the 2025 Directions to capture the complete operative framework.

Key amendments introduced in 2026

The 2026 Directions focus on limited but targeted changes in specific provisions and annexures of the 2025 Directions. These relate mainly to:

  • Inclusion and correct description of “other development financial institutions”
  • Fine-tuning of wording in reporting instructions
  • Updating institutional references in Form A (Annex I) and Form VIII (Annex II)
  • Replacing the term “specified” with “notified”
  • Introducing a new reporting line for balances parked under the Standing Deposit Facility Scheme

1. Expansion of reference to “other development financial institutions”

In paragraph 19(1) of the 2025 Directions, the 2026 amendments direct that the following words be inserted:

“other development financial institutions as defined in section 2 (cccii) of the RBI Act, 1934”

Practical implication

  1. Broader coverage of eligible entities
    By explicitly referring to “other development financial institutions” as defined in section 2 (cccii) of the Reserve Bank of India Act, 1934, the regulatory text now clearly recognises a wider set of development financial institutions when determining eligible instruments or categories under the CRR–SLR framework (as applicable to the relevant paragraph context).

  2. Alignment with statutory definition
    Instead of relying on an implied or narrower understanding, the Directions now anchor the terminology directly in the statutory definition under the RBI Act, thereby reducing interpretational ambiguity.

2. Deletion of words under “Cash in hand” in paragraph 26(6)(v)

In paragraph 26(6)(v) of the 2025 Directions, the Amendment Directions mandate that the words:

“under ‘Cash in hand’”

shall be deleted.

Practical implication

  • This change appears to streamline or clarify the classification of balances or items counted for SLR or reporting purposes.