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RBI revises counterparty credit risk capital rules

16 March 20261 min read
BANKING & FINANCERBI revisescounterpartycredit risk capitalrules16 March 2026safalsetu.com

Why in the news

The Reserve Bank of India amended how banks count and provide capital for the risk that a counterparty may default, matching international Basel practice.

Key facts

  • RBI revised the capital adequacy framework for counterparty credit risk.
  • The amendment aligns India with Basel norms.
  • Capital must be held on a standalone as well as a consolidated basis.
  • The framework updates add-on factors, used to compute potential future exposure on derivative contracts.

Takeaway

  • The revision updates how banks measure exposure arising from derivatives.
  • Compliance applies to both a bank on its own and the banking group together.

Exam angle

  • Regulator: Reserve Bank of India.
  • Alignment: Basel norms.
  • Technical term: add-on factors for potential future exposure in derivatives.
  • Capital levels: standalone and consolidated.

Test yourself

1. The RBI's revised rules on counterparty credit risk align Indian banking regulation with which global standard?

The amendment aligns India's regulations with global Basel norms.

2. At which levels must banks maintain capital under the revised counterparty credit risk framework?

Banks must meet capital requirements at standalone and consolidated levels.

3. The updated add-on factors in the RBI revision are used to calculate what?

Add-on factors help compute potential future exposure on derivatives.

This topic is part of Daily Current Affairs 12 & 13 & 14 March 2026 (28 topics).

All topics of the dayDay quizMarch 2026

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