J&K&L HC: Bail is Not Absolute For Juveniles in Heinous Cases and Can be Denied to Serve Justice  ||  Delhi HC: Expired Driving Licenses Do Not Enjoy Deemed Continuity After 2019 MV Act Amendment  ||  MP High Court: Ex-Gratia Payments are Dependents’ Last Hope and Rules Should be Applied Liberally  ||  Orissa HC: SC’s Mihir Rajesh Shah Directive on Written Arrest Grounds Applies Prospectively  ||  Delhi HC: Tenant Liable For Possession Through Family; Non-Residence Claim Doesn’t Excuse Liability  ||  Allahabad High Court: Muslims Can Use Guardians and Wards Act Provisions to Seek Minor’s Custody  ||  Delhi High Court: Earlier Buyer Can Seek Cancellation of a Later Sale; Prior Rights Prevail  ||  Madras HC: 'Geetham' Restaurants Did Not Infringe 'Sangeetha' Trademark But Liable For Passing Off  ||  Bombay High Court: Disabled Employee Shifted Cadre Can’t Claim Past Service Seniority  ||  Supreme Court: Person Accepting a Section 28A Award May Seek Enhancement Via Appeals    

Modification in Master Directions Prudential Norms on Capital Adequacy for Local Area Banks (Directions), 2021 and Master Circular - Basel III Capital Regulations dated May 12, 2023- (Reserve Bank of India) (28 Feb 2024)

MANU/RMIC/0024/2024

Banking

1. Please refer to Master Circular - Basel III Capital Regulations dated May 12, 2023, and Master Direction - Prudential Norms on Capital Adequacy for Local Area Banks (Directions), 2021 dated October 26, 2021 ('capital adequacy guidelines').

2. As you are aware, the Master Direction - Classification, Valuation and Operation of Investment Portfolio of Commercial Banks (Directions), 2023 dated September 12, 2023 (hereinafter referred as 'MD on Investment') inter alia provides a clearly identifiable trading book under 'Held for Trading (HFT)' accounting sub-classification and introduces AFS-reserve which would be part of regulatory capital. In view of the changes cited above, it has been decided to amend the capital adequacy guidelines in alignment with the MD on Investment.

3. Accordingly, the provisions of Master Circular - Basel III Capital Regulations have been modified as provided in Annex 1.

4. It may be noted that 'Draft Guidelines on Minimum Capital Requirements for Market Risk - under Basel III' providing inter alia 'Definition of trading book' and 'Market Risk capital Requirements - Simplified Standardised Approach' were released on February 17, 2023 for public comments. While the revised definition of trading book for the purpose of capital adequacy will be as provided in Annex I of MD on Investment, the final guidelines on 'Market Risk Capital Requirements - Simplified Standardised Approach' will be implemented at a later date and detailed guidelines will be issued separately.

5. Considering the transition to 'Market Risk Capital Requirements - Simplified Standardised Approach', the extant market risk capital requirements have also been recalibrated by introducing intermediate scalers. Banks should keep this in view while reviewing their strategies and capital planning measures.

6. Further, the provisions of Master Direction - Prudential Norms on Capital Adequacy for Local Area Banks (Directions), 2021 have been modified.

Applicability

7. These instructions shall be applicable from April 1, 2024 to all Commercial Banks (excluding Regional Rural Banks).

Tags : CAPITAL ADEQUACY   GUIDELINES   MODIFICATION  

Share :        

Disclaimer | Copyright 2026 - All Rights Reserved