The Reserve Bank of India (RBI) on May 12, 2023 has issued Master Circular – Basel III Capital Regulations.
The following has been stated namely: -
•Minimum Capital Requirement -
1. Approach to Implementation and Effective Date - It was decided that all commercial banks in India (excluding Local Area Banks and Regional Rural Banks) should adopt a Standardised Approach for credit risk.
2. Capital Adequacy at Group / Consolidated Level - All banking and other financial subsidiaries except subsidiaries engaged in insurance and any non-financial activities (both regulated and unregulated) should be fully consolidated for the purpose of capital adequacy.
•Supervisory Review and Evaluation Process –
1. Introduction to the SREP - The objective of the SRP is to ensure that banks have adequate capital to support all the risks in their business and encourage them to develop and use better risk management techniques for monitoring and managing their risks.
•Market Discipline
1. The aim is to encourage market discipline by developing a set of disclosure requirements that will allow market participants to assess key information on the scope of application, capital, risk exposures, risk assessment processes, and hence, the capital adequacy of the institution.
Disclaimer: Please refer to the Master Circular to view for further details.
[Notification No. DOR.CAP.REC.15/21.06.201/2023-24]
