Reserve Bank of India amends commercial bank financial statement directions to disclose Section 11 deposits earmarked as credit risk mitigation

The Reserve Bank of India issued amendment directions updating the Reserve Bank of India (Commercial Banks - Financial Statements: Presentation and Disclosures) Directions, 2025 to add a new balance sheet disclosure linked to the concentration risk management framework. Commercial banks must disclose, by note under Schedule 1 (Capital), any amount of the deposit held under Section 11(2)(b)(i) of the Banking Regulation Act, 1949 that has been earmarked and designated as credit risk mitigation for offsetting non-centrally cleared derivative exposures to the Head Office, including overseas branches of the Head Office, and that is not reckoned for regulatory capital or other statutory requirements. The amendment modifies the table under paragraph 5(1) of the 2025 Directions and includes prescribed note wording requiring disclosure of the current year and previous year amounts. The change takes effect from the date a bank decides to implement paragraphs 3(1) to 3(4) of the Reserve Bank of India (Commercial Banks - Concentration Risk Management) Amendment Directions, 2025, or from 1 April 2026, whichever is earlier.