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RBI/2018-19/156
DBR.No.BP.BC.31/21.01.003/2018-19
April
1, 2019
All Scheduled Commercial Banks
(Excluding Regional Rural Banks)
Madam/Dear Sir,
Large
Exposures Framework (LEF)
Please refer to the circular DBR.No.BP.BC.43/21.01.003/2016-17 dated
December 01, 2016 on the subject. After due consideration of
the representations received from stakeholders, it has been decided as
under:
i.
Non-centrally
cleared derivatives exposures will be outside the purview of exposure
limits till April 01, 2020. However, banks must compute these exposures
separately and report to the Department of Banking Regulation on quarterly
basis.
ii.
For
the purpose of reckoning exposure limits under LEF, an Indian branch of a
foreign G-SIB will be considered as any other Indian bank and can
accordingly take exposure upto 25% of its Tier I capital on another
non-GSIB in India.
iii.
The
interbank exposure limit of an Indian branch of a foreign G-SIB with its
Head Office will be 20% of its Tier I capital in India.
iv.
The
eligible capital base for the purpose of LEF will be the effective amount
of Tier 1 capital fulfilling the criteria defined in the Master Circular on Basel III – Capital Regulation dated
July 1, 2015 (as amended from time to time) as per the last
audited balance sheet. However, the infusion of capital under Tier I after
the published balance sheet date may also be taken into account for the
purpose of Large Exposures Framework. Banks shall obtain an external
auditor’s certificate on completion of the augmentation of capital and
submit the same to the Reserve Bank of India (Department of Banking
Supervision) before reckoning the additions to capital funds.
v.
For
Indian Banks, profits accrued during the year, subject to provisions
contained in para 4.2.3.1 (vii) of Master
Circular on Basel III – Capital Regulation dated July 1, 2015 (as
amended from time to time), will also be reckoned as Tier I capital for the
purpose of Large Exposures Framework.
vi.
No
additional time shall be given to banks that are in breach of specified
interbank limits with other banks or with their Head Offices, to bring
their exposures within limit.
Yours faithfully,
(Saurav Sinha)
Chief General Manager-in-Charge
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