The Reserve Bank of India (RBI) on April 27, 2026, issued the Reserve Bank of India (Commercial Banks - Capital Charge for Credit Risk – Standardised Approach) Directions, 2026.
The following has been stated: -
•The Basel Committee on Banking Supervision introduced the Basel III framework (2017) to ensure consistent and risk-sensitive calculation of bank capital, offering Standardised (SA) and Internal Ratings-Based (IRB) approaches for credit risk.
•The Reserve Bank of India has chosen to implement the Standardised Approach for banks under its jurisdiction.
•These directions are issued under Sections 21 and 35A of the Banking Regulation Act, 1949, in the public and depositor interest, and will come into effect from April 01, 2027.
•The framework applies to banking book exposures of commercial banks, including entities like the State Bank of India, but excluding certain small or local banks.
•It provides detailed definitions of key terms such as capital market exposure, consumer credit, counterparty banks, and specialised lending.
•The directions also clarify various exposure types like real estate, project finance, equity exposures, and non-performing assets.
•Overall, the framework standardizes credit risk assessment and capital calculation to strengthen banking sector stability.
The detailed notification is given in the document below.
[Notification No.: RBI/DOR/2026-27/397 DOR.CRE.REC 5/21.06.201/2026-27]
