RBI Sets Capital Requirements Norms for Market Risk Under Basel III
The Reserve Bank of India has issued guidelines on capital requirements for market risk that align with the updated Basel III framework. From April 1, 2027, banks will be prohibited from reclassifying financial instruments to achieve lower capital requirements under the new market risk framework.
The transition will require banks to adopt a simplified standardized approach for calculating risk-weighted assets. The guidelines also include revisions to interest rate risk tables and changes in the treatment of debt funds, strengthening prudential norms for the banking sector.
