The Reserve Bank of India (RBI) has issued the Reserve Bank of India (Commercial Banks – Forthcoming Instructions) Amendment Directions, 2026, revising the framework for calculating minimum capital requirements for counterparty credit risk (CCR). The changes are intended to bring India’s framework into closer alignment with international standards and will take effect from April 1, 2027.
The revised framework will apply to commercial banks with an international presence or a consolidated group-wide derivative book value of ₹25,000 crore or more. Other commercial banks may choose between the existing Current Exposure Method (CEM) and the revised Standardised Approach for Counterparty Credit Risk (SA-CCR).
The amendments provide greater clarity on the treatment of central counterparties, clearing members, initial margin, default funds, collateral and netting arrangements. They also introduce additional provisions covering transactions where banks act as clearing members of SEBI-recognised stock exchanges in equity and commodity derivatives.
The framework also addresses the treatment of multiple margin agreements and netting sets, deferment of option premiums and the calculation of effective notional amounts for options. New disclosure templates for SA-CCR have also been incorporated.
The changes are significant for banks with substantial derivatives activity because CCR capital requirements directly influence the amount of regulatory capital needed against exposures arising from derivative transactions.
For banks, implementation will require updates to capital calculations, risk systems, data architecture, derivative exposure measurement and regulatory disclosures before the April 2027 effective date.
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