Reserve Bank of India (Small Finance Banks – Governance) Third Amendment Directions, 2026

The Reserve Bank of India (Small Finance Banks – Governance) Third Amendment Directions, 2026, issued under Section 35A of the Banking Regulation Act, 1949, amend the Reserve Bank of India (Small Finance Banks – Governance) Directions, 2025. Consequent to the revised Basel Pillar 3 disclosure framework, the amendment updates provisions relating to remuneration disclosures and share-linked instruments by cross- referring them to the revised Prudential Norms on Capital Adequacy Directions. The amendments come into effect from 1 April 2027. The amendment updates provisions relating to share-linked instruments, requires remuneration disclosures to be made in accordance with the revised Prudential Norms on Capital Adequacy Directions, retains the requirement to fair value share-linked instruments using the Black-Scholes model, and aligns governance disclosures with the revised Basel Pillar 3 framework.