RBI Market Risk Capital Directions 2026 and Eased FPI KYC
Why in the news
The Reserve Bank of India notified its final directions on market-risk capital for commercial banks and, separately, relaxed know-your-customer norms for foreign portfolio investors.
Two RBI measures
| Measure | Effective date | Content |
|---|---|---|
| RBI (Commercial Banks – Minimum Capital Requirements for Market Risk) Directions, 2026 | 1 April 2027 | Basel III based; includes the Fundamental Review of the Trading Book (FRTB) |
| FPI KYC easing | 18 September 2026 | Specified documents may be certified by authorised authorities outside India |
Concept
- Market risk is the chance of loss from movements in interest rates, equity prices, exchange rates and commodity prices.
Exam angle
- Regulator: RBI.
- Framework: Basel III with FRTB.
- Date from which new market-risk rules apply: 1 April 2027.
- Investor class given KYC relief: FPIs.