In September 2025, the Reserve Bank of India ( RBI ) released ‘ RBI (Basel III Capital Regulations-PDI in AT 1 Capital) Directions,2025 ’, raising the limit for perpetual debt that banks can raise overseas and use as part of their core capital.

The RBI has also revised the regulations for Small Business Loans (SBL), permitting more frequent adjustments to the credit risk spread charged to borrowers.

Key Highlights:

Applicable to: The new direction is applicable to all Scheduled Commercial Banks (SCB) (excluding Small Finance Banks (SFB), Payments Banks (PB) and Regional Rural Banks (RRB)).

Effective from: These Directions shall come into force from October 01, 2025 .

New Limit: The Perpetual Debt Instruments (PDIs) issued in foreign currency/ rupee denominated bonds ove

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