Discussion Paper on Expected Loss Based Approach for Loan Loss Provisioning by Banks

In the Statement on Developmental and Regulatory Policies announced by RBI on Friday, RBI said that as a step towards converging with globally accepted prudential norms, it will issue a discussion paper on the proposed transition for stakeholder comments. Banks currently follow the incurred loss approach for provisioning on their loan assets, whereby provisions on…

RBI issues guidelines to market participants regarding exchange of variation margin (VM) for NCCDs

In today’s (June 8, 2022) statement of development and regulatory policies the Reserve Bank of India issued guidelines to market participants regarding the exchange of variation margin (VM) for non-centrally cleared derivatives (NCCDs). Derivatives are financial instruments whose value is derived from other underlying assets. There are mainly four types of derivative contracts such as…

The threshold limit for Small Business Customers increased to align with the Basel III framework: RBI

In order to protect depositors from the risk of a bank becoming insolvent, the banking regulator has prescribed banks and other authorised financial institutions to fund themselves with a minimum amount of capital (CAR) in terms of Basel III Framework on Liquidity Standards – Liquidity Coverage Ratio (LCR), Liquidity Risk Monitoring Tools and LCR Disclosure…