RBI notifies “Implementation of Basel III Capital Regulations in India – Amendments”

With reference to the ‘Guidelines on Implementation of Basel III Capital Regulations in India’ issued vide circular DBOD.No.BP.BC.98/21.06.201/2011-12 dated May 2, 2012, RBI has now notified some amendments to this Circular and these guidelines along with subsequent amendments have been incorporated in the latest Master Circular DBOD.No.BP.BC.6/21.06.201/2014-15 dated July 1, 2014 on ‘Basel III Capital Regulations’.

The earlier guidelines have reviewed further by RBI with a view to ease raising of Non-Equity Regulatory Capital instruments by Banks under Basel III framework. Correspondingly, some definite eligibility measures of such instruments have been amended. These are also envisioned to incentivize investors and to spread the investor base.

These Amendments relate to:-

  • Non-equity Regulatory Capital Instruments (Additional Tier 1 and Tier 2) – Loss Absorption Mechanism
  • Additional Tier 1 Capital Instruments – Exercise of Call Option
  • Tier 2 Capital Instruments – Maturity Period
  • Limits on recognition of Non-equity Regulatory Capital Instruments (Additional Tier 1 and Tier 2) for CRAR
  • Non-equity Regulatory Capital Instruments (Additional Tier 1 and Tier 2) – Issuance to Retail Investors
  • Coupon Discretion on Additional Tier 1 Debt Capital Instruments

These amended guidelines become applicable with immediate effect and have been incorporated in the subsequent Master Circular on Basel III Capital Regulations.

The Amendments: CBII010914FA

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