 "RBI revises capital adequacy norms")
The Reserve Bank of India (RBI) has revised the guidelines for capital adequacy and liquidity norms. These will come into effect from Wednesday.
Some of the changes include rise in the risk weight for their default fund contributions to a non-qualifying Central Counter Party (CCP). It also enhanced the disclosure requirements for provisions for credit risks. Banks can maintain Counter Cyclical Capital Buffer in the form of equity capital only. Earlier they could use other fully loss absorbing capital instruments.
RBI said banks must update their data sets at least once in three months, and should also reassess them whenever market prices are subject to material changes.
However, RBI might ask banks to calculate their value-at-risk using a shorter observation period if it is felt necessary due to a significant upsurge in price volatility.
Some of the changes include rise in the risk weight for their default fund contributions to a non-qualifying Central Counter Party (CCP). It also enhanced the disclosure requirements for provisions for credit risks. Banks can maintain Counter Cyclical Capital Buffer in the form of equity capital only. Earlier they could use other fully loss absorbing capital instruments.
RBI said banks must update their data sets at least once in three months, and should also reassess them whenever market prices are subject to material changes.
However, RBI might ask banks to calculate their value-at-risk using a shorter observation period if it is felt necessary due to a significant upsurge in price volatility.