The Capital Buffer
Katrela Ventures Daily Update · Investment, M&A and Business Innovation Digest · 23 September 2026
Key takeaways
Minimum CRAR stays at 15% of risk-weighted assets across all NBFC layers.
Upper-layer NBFCs need Tier 1 capital of 10% with CET1 of 9%; gold lenders need Tier 1 of 12%.
Minimum net owned funds are ₹10 crore for general NBFCs and ₹20 crore for housing finance companies.
Stay ahead with the latest funding rounds, strategic acquisitions, and groundbreaking innovations shaping the business world!
📩 #Read the full update below.
01. TOP STORIES
Mastercard Exits Pine Labs in Rs 933.5 Crore Bulk Deal: Global payments giant Mastercard (via Mastercard Asia/Pacific Pte. Ltd.) has sold its entire 4.31% stake in fintech company Pine Labs by offloading 4.97 crore shares at Rs. 187.75 per share on the BSE. The shares were acquired by prominent domestic and global institutional investors, led by ICICI Prudential Life Insurance (93.1 lakh shares for Rs. 174.8 crore), Societe Generale, and Citigroup Global Markets Singapore, alongside buyers like Goldman Sachs, Edelweiss, and Kotak Mutual Fund.PayGlocal Receives IFSCA In-Principle Approval for GIFT-IFSC Unit: Cross-border payments company PayGlocal has secured in-principle approval from the International Financial Services Centres Authority (IFSCA) to establish a wholly owned subsidiary (WoS) as a Payment Service Provider (PSP) in GIFT-IFSC. The approval covers account issuance, e-money accounts, cross-border money transfers, and merchant acquisition. Founded in 2021 and backed by Tiger Global, Peak XV, and BEENEXT.
02. QUICK TAKES
NBFC Capital Adequacy 2026: RBI Tightens the Rules on CRAR, Tier 1 and NOF
Ecosystem Scale: Minimum CRAR (All Layers): 15% of RWA | Upper Layer Tier 1: 10% + CET1 9% | Gold-Lending Tier 1: 12% | Minimum NOF: Rs.10 Cr (General) / Rs.20 Cr (HFC)
The capital adequacy framework for NBFCs went through two significant changes in just three months this year. On January 13, 2026, the RBI released draft directions clarifying how Owned Fund and Tier 1 capital must be computed introducing a critical distinction between two different uses of Tier 1 capital., On March 10, 2026, the RBI finalised the Second Amendment to the Prudential Norms on Capital Adequacy Directions, allowing NBFCs to include adjusted quarterly profits in the Owned Fund calculation without waiting for year-end audited accounts. Together, these two developments change how CRAR is calculated today.
The dual-Tier-1 problem is structural, not cosmetic: Tier 1 capital for computing CRAR now includes adjusted quarterly profits under the March amendment, but Tier 1 capital for credit and investment concentration limits must still be based on the latest audited or limited-review financials - two separate figures compliance teams must track in parallel. Layering compounds this the 15% CRAR floor is only the base - Middle and Upper Layer NBFCs carry an additional 10% Tier 1 requirement,Upper Layer adds a 9% CET1 floor, and gold-lending NBFCs face a 12% Tier 1 minimum regardless of layer.
Risk-weighting mechanics explain why two NBFCs with identical loan books can sit in very different capital positions secured residential loans carry lower risk weights than unsecured personal loans (up to 125% above certain thresholds), while qualifying infrastructure loans under the January 2026 Concentration Risk Amendment can draw reduced weights of 50–75%. Off-balance-sheet exposures still consume capital via a 50% credit conversion factor, and PDI investments trigger NOF deductions once they cross 10% of owned funds - making portfolio composition a capital-management decision, not just a credit-strategy one.
The consequences for falling short are not theoretical: a sub-15% CRAR triggers supervisory restrictions on fresh lending, dividends and branch expansion persistent breaches escalate into the Prompt Corrective Action framework and sustained inadequacy can ultimately lead to cancellation of the Certificate of Registration under Section 45-IA - a power the RBI has exercised before.
Katrela's Take
➢ The CRAR floor stays at 15%, but capital adequacy just got more dynamic - quarterly profits now flow into Tier 1 for CRAR, giving profitable NBFCs real mid-year headroom. The catch: January 2026 split Tier 1 into two figures - one for CRAR, one for concentration limits. Using the quarterly-adjusted number for both overstates lending headroom and flags as a direct violation at RBI inspection. The real test now isn't clearing 15% - it's whether compliance has caught up to a capital base that moves quarterly, not annually.
03. FUNDING BRIEF
Proactive AI startupSol has emerged from stealth with $4 million(Rs. 33.5 crs. approx.) in a Funding round led by General Catalyst and Nexus Venture Partners.Founded in August 2025 by Anish Karan, Prateek Srivastava, and Ranjith Nair, the startup builds an AI assistant that identifies email commitments and independently handles required tasks - such as research, document creation, presentation development, meeting scheduling, and drafting replies via a dedicated computer environment with over 100 pre-built skills while keeping users in control of final approvals.Delhi-based carry-first streetwear brand Indian Walker part of Darpan Sanghvi's CoFounder Circle (CFC) Venture Studio has raised an undisclosed amount in a Pre-seed funding round from Palette Wealth Management (PWM) at a post-money valuation of Rs. 20 crs. Founded last year by Md. Sakib, the mid-premium daily commute brand offers backpacks priced between Rs. 2,000 and Rs. 4,000, with its Level Up collection (led by the Stride backpack) crossing 10,000 units sold. Currently selling via its D2C website with upcoming expansions to Amazon, Flipkart, Myntra, and quick-commerce.Bengaluru-based electric mobility startup Ultraviolette has raised $85 million (Rs. 710 crs. approx.) in a Funding round led by Yali Capital and TDK Ventures. Founded in 2016 by Narayan Subramaniam and Niraj Rajmohan, the EV and battery technology developer bringing total funds raised since August 2025 to $151 million will deploy the capital to scale production of its F77 and X-47 electric motorcycles alongside new manufacturing facility with an annual capacity of up to 500,000 units, and fuel expansion into the US market in 2027, Latin America, and Southeast Asia (building on its current footprint in India and 20 European countries).
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Frequently asked questions
What is the minimum CRAR for NBFCs in India?
15% of risk-weighted assets, applicable across all layers of the scale-based framework.
What are the Tier 1 requirements for NBFCs?
Upper-layer NBFCs need Tier 1 capital of 10% with CET1 of 9%, and gold-lending NBFCs need Tier 1 capital of 12%.
What compliance risk should NBFCs watch?
Katrela Ventures notes that Tier 1 is now computed two ways, one for CRAR and one for concentration limits; using the quarterly-adjusted figure for both overstates lending headroom.
This edition was first published in the Katrela Ventures Daily Update newsletter on LinkedIn. Subscribe to get the digest every morning.
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