The Reserve Bank of India (RBI) announced on Friday that it will not accept industry feedback opposing the inclusion of quarterly profits in capital adequacy calculations. Currently, banks can incorporate quarterly profits into their capital, but they must meet additional qualifying conditions related to bad loan provisions. The RBI stated that banks need to consider factors like potential charges on profits and seasonal variations before including these profits in their regulatory capital. The regulator received feedback warning that integrating quarterly profits into Common Equity Tier 1 (CET1) capital could misrepresent banks' financial strength due to temporary profit surges from factors like festive seasons. RBI Governor Sanjay Malhotra clarified that the change does not alter net profit calculations but aims to provide a better reflection of banks' capital. The decision underscores the importance of maintaining rigorous standards to prevent unsustainable credit expansion.