The Reserve Bank of India issued revised amendments to its capital adequacy directions for commercial banks, updating the regulatory capital treatment of irrevocable payment commitments issued by banks to clearing corporations of stock exchanges on behalf of clients. Such commitments are treated as financial guarantees with a 100 percent credit conversion factor, but capital is required only on the exposure recognised as capital market exposure under the Reserve Bank of India (Commercial Banks - Concentration Risk Management) Directions, 2025. Banks must apply a 125 percent risk weight to the amount taken for capital market exposure. The change takes effect from the date a bank implements the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026 (Revised) or from 1 July 2026, whichever is earlier, and supersedes the earlier second amendment directions dated 13 February 2026.
Reserve Bank of India 2026-03-30
Reserve Bank of India revises capital adequacy treatment for banks’ irrevocable payment commitments to stock exchange clearing corporations
The Reserve Bank of India has revised capital adequacy rules for commercial banks, updating the regulatory capital treatment of irrevocable payment commitments issued to clearing corporations on behalf of clients. These commitments are treated as financial guarantees with a 100 percent credit conversion factor, but capital is required only on the portion recognised as capital market exposure, which must carry a 125 percent risk weight. The change applies from the earlier of a bank’s implementation of the RBI (Commercial Banks – Credit Facilities) Amendment Directions, 2026 (Revised) or 1 July 2026, and supersedes the second amendment directions of 13 February 2026.