RBI Amends Financial Statement Disclosure Norms for Small Finance Banks — LCR, NSFR, and Remuneration Disclosures Removed

Overview of the Amendment

The Reserve Bank of India has issued a significant regulatory update impacting the financial reporting obligations of Small Finance Banks operating across India. Through a formal notification dated 30 July 2026, the RBI has introduced the Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) Fourth Amendment Directions, 2026, bringing about targeted modifications to the existing Reserve Bank of India (Small Finance Banks – Financial Statements: Presentation and Disclosures) Directions, 2025.

These amendments, which will take effect from 1 April 2027, eliminate certain disclosure requirements that were previously mandated under the principal Directions. The changes are directly linked to a broader regulatory realignment following the introduction of Basel Pillar 3 disclosure norms for Small Finance Banks.

Regulatory Reference and Authority

The amendment has been issued under the RBI's circular reference RBI/DOR/2026-27/213 DOR.ACC.REC.No.190/21.04.018/2026-27, dated 30 July 2026, and has been signed by Sunil T S Nair, Chief General Manager of the Reserve Bank of India.

The legal authority for issuing these directions flows from Section 35A of the Banking Regulation Act, 1949, along with all other enabling provisions of law applicable to the Reserve Bank of India. The RBI, being satisfied that the amendments are necessary and expedient in the public interest, has exercised its statutory powers to modify the existing disclosure framework applicable to Small Finance Banks.

Background and Context

Why were these amendments introduced?

The primary driver behind this amendment is the issuance of the Reserve Bank of India (Small Finance Banks – Prudential Norms on Capital Adequacy) Fifth Amendment Directions, 2026, which introduced comprehensive Basel Pillar 3 disclosure requirements for Small Finance Banks.

Basel Pillar 3 is the third pillar of the Basel III capital framework and focuses on market discipline through enhanced transparency and public disclosure. With Pillar 3 disclosures now being addressed separately and in greater detail under the Capital Adequacy framework, the RBI determined that retaining the same or overlapping disclosures within the Financial Statements Directions would result in redundancy.