RBI brings Capital Treatment of Banks’ Balance Sheet Items in closer Alignment with Basel Framework

RBI brings Capital Treatment of Banks’ Balance Sheet Items in closer Alignment with Basel Framework

"The RBI has made some amendments to the treatment of certain balance sheet items for the purposes of determining banks' regulatory capital. The review was carried out with a view to further aligning the definition of regulatory capital with the internationally adopted Basel III capital standards," it said in a press release on 1st March 2016. 

These relaxations will free approximately Rs 30,000-35,000 crore for the state-run banks and over Rs 5,000 crore for the private sector ones, going by the December 2015 numbers. 
 
The unlocking of additional capital will be of help to lenders who witnessed huge jump in bad assets in the December quarter on account of the asset quality review, where RBI gave them a list of accounts to be classified as NPAs and make provisions for those accordingly. 
For details please refer to following Link :RBI amends capital recognition rules

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