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# Reserve Bank of India finalises Basel market-risk capital rules for banks
- URL: https://www.theglobalbanker.com/reserve-bank-of-india-finalised-basel-market-risk-capital-rules-for-banks/
- Published: 2026-09-22T10:24:41.000Z
- Updated: 2026-10-02T01:31:22.000Z
- Description: The Reserve Bank of India finalised Basel III market-risk capital requirements for Indian banks, with the new trading-book framework taking effect on 1 April 2027.
- Author: TGB Editorial Team
- Tags: Regulations, Asia-Pacific

The Reserve Bank of India finalised minimum capital requirements for banks' market risk under Basel III. The directions will take effect on 1 April 2027\. They set out the boundary between the banking book and the trading book and the capital requirements for market risk. The framework follows a draft published in February 2023.

The central bank revised the proposal after considering stakeholder feedback. It adopted the Simplified Standardised Approach proposed in the draft, which the RBI said ensures simplicity of regulation, flexibility and ease of adoption. The rules apply to covered banks on both standalone and consolidated bases.

#### TRADING BOOK BOUNDARIES TIGHTEN

The directions cover interest-rate and equity risk in the trading book, while foreign-exchange, gold and precious-metal risks are captured across both banking and trading books. The trading book comprises all instruments classified as 'Held for Trading' under the RBI's investment portfolio directions; all other items fall in the banking book.

Banks may not reclassify instruments between the trading book and the banking book with the intention of achieving lower capital requirements. 

#### IMPLEMENTATION WORK STARTS NOW

The directions take effect about six months after publication; intermediate transition scalars have been in effect since 1 April 2024\. 

Among other changes from the draft, the RBI revised the capital treatment of debt mutual funds and ETFs in the trading book to rely on underlying risk drivers, and extended the treatment of credit-derivative hedges to total return swaps.