Bank capital needs may rise 15-20% based on draft RBI market risk norms

The Reserve Bank of India’s (RBI’s) recently released draft guidelines on minimum capital requirements provide more flexibility to banks for treatment of certain instruments, but lenders may need 15-20 per cent more in capital for market risk, bank officials said.

On February 17, the RBI released draft guidelines on minimum capital requirements for market risk based on Basel III standards. It has sought stakeholder comments on the draft by April 15.
 

The guidelines make a clear demarcation between instruments to be traded in the trading book and the banking book. The instruments kept in the former are subject to market capital