Large Exposures Framework- (Reserve Bank of India) (03 Jun 2019)
MANU/RMIC/0058/2019
Banking
Please refer to the instructions contained in circulars DBR.No.BP.BC.43/21.01.003/2016-17 dated December 01, 2016 and DBR.No.BP.BC.31/21.01.003/2018-19 dated April 01, 2019 on "Large Exposures Framework (LEF)".
2. In order to capture exposures and concentration risk more accurately and to align the above instructions with international norms, the following amendments have been incorporated in the above mentioned instructions:
i) Exclusion of entities connected with the sovereign from definition of group of connected counterparties.
ii) Introduction of economic interdependence criteria in definition of connected counterparties.
iii) Mandatory application of look-through approach (LTA) in determination of relevant counterparties in case of collective investment undertakings, securitisation vehicles and other structures.
3. Revised guidelines superseding the above mentioned circulars are annexed. These have come into effect from April 1, 2019 (as was already specified in our LEF circular dated December 1, 2016), except guidelines in respect of para 2(ii) above (contained in paragraphs 6.2(b), 6.7, 6.8, 6.9, and 6.10 of the Annex) and non-centrally cleared derivatives exposures, which will become applicable with effect from April 1, 2020.
Tags : CONCENTRATION RISK EXPOSURES FRAMEWORK
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