Mumbai, April 8 -- The Reserve Bank of India on Wednesday announced measures to ease capital requirements for banks and free up capital for lending and other productive activities.

These measures aim to make it easier to compute or add quarterly profits to the bank's capital calculation, as well as to do away with the mandate to maintain an investment fluctuation reserve (IFR).

Currently, banks are permitted to include their quarterly profits in the computation of their capital-to-risk-weighted assets ratio (CRAR). However, this is subject to incremental provisions for non-performing assets (NPAs) at the end of any of the four quarters of the previous financial year, not having deviated more than 25% of the average of the four quarters....