RBI Amends Capital Adequacy Norms to Mitigate Counterparty Credit Risk
These revised rules aim to align Indian banking standards with global Basel III guidelines regarding Counterparty Credit Risk (CCR).
Banks must now use updated 'add-on factors' to estimate potential future exposure from derivative contracts and off-balance sheet items.
Specific capital charges have been mandated for banks acting as clearing members of SEBI-recognised exchanges for equity and commodity derivatives.
Exam Perspective: Strengthening CCR rules prevents systemic failures by ensuring banks hold sufficient capital against potential defaults by trading partners before settlement.
Key Facts / Static GK
Off-Balance Sheet (OBS): Potential liabilities like guarantees and derivatives not shown on a balance sheet
QCCP: Qualifying Central Counterparty
Basel III: Global regulatory framework for bank capital adequacy
Practice Quiz — 12 March 2026
Q1. Who announced the formation of the high-level expert group to design the technology roadmap for India's securities market ecosystem?
Q2. According to the updated RBI guidelines on Counterparty Credit Risk (CCR), what is the prescribed risk weight for trade exposures to Qualifying Central Counterparties (QCCPs)?
Q3. What is the specific cancer care coverage amount provided to account holders of the 'bob Women Sapphire' Savings Account?
Q4. Which of the following statements is true regarding the restructuring of the Jal Jeevan Mission?
Q5. Which airport in Tamil Nadu was recently designated as an 'International Airport' by the Union Cabinet?
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