Featured Product

    RBI Issues Circular on Large Exposures Framework for Banks

    March 23, 2020

    RBI circular on large exposures framework communicates the central bank's decision that non-centrally cleared derivatives exposures will be outside the purview of exposure limits until April 01, 2021. The circular also provides clarification with respect to the guidelines on credit risk mitigation instruments under the large exposures framework. The circular is applicable to all scheduled commercial banks, excluding regional rural banks.

    According to the large exposures framework circular dated June 03, 2019, any credit risk mitigation instrument from which credit risk mitigation benefits, such as shifting of exposure or risk-weights, are not derived may not be counted as an exposure on the credit risk mitigation provider. Banks had sought clarity on whether this specific guideline will apply to exposures to a person resident outside India. In this context, RBI has clarified that this clause will also apply to non-fund-based credit facilities provided to a person resident outside India. The exposure can be reckoned on the person resident outside India, instead of treating it as an exposure on the Head Office or other overseas branch, provided the transaction is otherwise compliant with the Foreign Exchange Management (Guarantees) Regulations, 2000. The exposures, thus, shifted to a person resident outside India will attract a minimum risk-weight of 150%.

     

    Keywords: Asia Pacific, India, Banking, Large Exposures, Basel III, Non-Centrally Cleared Derivatives, Credit Risk, Derivatives, Regulatory Capital, RBI

    Featured Experts
    Related Articles
    News

    EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS

    The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.

    February 23, 2024 WebPage Regulatory News
    News

    ECB to Expand Climate Change Work in 2024-2025

    Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.

    February 23, 2024 WebPage Regulatory News
    News

    BIS Bulletin Examines Cognitive Limits of Large Language Models

    The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.

    January 25, 2024 WebPage Regulatory News
    News

    ECB is Conducting First Cyber Risk Stress Test for Banks

    As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.

    January 24, 2024 WebPage Regulatory News
    News

    EBA Continues Momentum Toward Strengthening Prudential Rules for Banks

    A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.

    January 24, 2024 WebPage Regulatory News
    News

    EU and UK Agencies Issue Updates on Final Basel III Rules

    The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards

    December 19, 2023 WebPage Regulatory News
    News

    Industry Agency Expects Considerable Uptake for Swiss Climate Scores

    The Swiss Federal Council recently decided to further develop the Swiss Climate Scores, which it had first launched in June 2022.

    December 18, 2023 WebPage Regulatory News
    News

    BCBS Consults on Disclosure of Climate Risks, Issues Other Updates

    The Basel Committee on Banking Supervision (BCBS) launched consultation on a Pillar 3 disclosure framework for climate-related financial risks, with the comment period ending on February 29, 2024.

    December 18, 2023 WebPage Regulatory News
    News

    US Government Moves to Regulate Development and Use of AI Models

    The U.S. President Joe Biden signed an Executive Order, dated October 30, 2023, to ensure safe, secure, and trustworthy development and use of artificial intelligence (AI).

    December 18, 2023 WebPage Regulatory News
    News

    MAS Launches Gprnt Digital Platform for ESG Reporting for SMEs

    The Monetary Authority of Singapore (MAS) launched an integrated digital platform, Gprnt, also known as “Greenprint.”

    November 29, 2023 WebPage Regulatory News
    RESULTS 1 - 10 OF 8949