RBI releases draft norms for counterparty credit risk
Photo Credit: Shah Junaid/VCCircle

The Reserve Bank today released draft guidelines for computing exposure for counterparty credit risk (CCR) arising from derivative transactions and capital requirements for bank exposures to central counterparties (CCPs).

The guidelines are based on the framework finalised by the Basel Committee on Banking Supervision (BCBS), the central bank said.

"The proposed revised guidelines will better capture the risks arising from over-the-counter (OTC) and also centrally-cleared derivative transactions," it said.

All the BCBS-member jurisdictions are required to implement the revised standards decided by 2017.

The bi-monthly policy statement announced by Governor Raghuram Rajan in April had first mentioned about coming out with draft guidelines on both these fronts, along with one on revised securitisation framework.

The Reserve Bank has requested the public to e-mail their comments and suggestions by July 22, after which it will come out with the final guidelines.

It proposes to implement the final guidelines by next April as against the BCBC decision to have it working from January 2017.

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