The Reserve Bank of India (RBI) has issued unified Draft Directions aimed at harmonizing the interest rate frameworks across all Regulated Entities (REs). The core objectives are to ensure effective monetary policy transmission, standardize the pricing of credit risk, and guarantee fair, non-discriminatory treatment of borrowers. The master direction takes effect on April 1, 2027, […]

1. Executive Summary The Reserve Bank of India (RBI) has issued draft directions to revise the Credit Valuation Adjustment (CVA) framework, aligning it with the final Basel III standards established by the Basel Committee on Banking Supervision (BCBS). CVA reflects the adjustment to the default risk-free prices of derivatives to account for potential counterparty default.

RBI Draft Directions Report: SNFA Context: To ensure transparency, prudence, and timely recovery, the Reserve Bank of India (RBI) has introduced draft directions to regulate instances where financial institutions acquire non-financial, immovable collateral assets to extinguish debt in exceptional cases of loan defaults. Applicable Entities: Commercial Banks NBFCs Co-operative Banks All India Financial Institutions 1