Basel III Disclosure Requirements on Regulatory Capital Composition

DBOD.No.BP.BC.   /21.06.201/2012-13

January 10, 2013

The Chairman and Managing Directors/
Chief Executives Officers of
All Scheduled Commercial Banks
(Excluding Local Area Banks and Regional Rural Banks)

Dear Sir,

Draft Guidelines on
Composition of Capital Disclosure Requirements

Please refer to the paragraph 87 (extract enclosed) of the Second Quarter Review of Monetary Policy Statement 2012-13 announced on October 30, 2012. It was indicated that the draft guidelines on composition of capital disclosure requirements, based on the proposals of the Basel Committee on Banking Supervision (BCBS), will be issued by end-December 2012.

2.    In this context, a reference is also invited to the circular DBOD.No.BP.BC.98/21.06.201/2011-12 dated May 2, 2012 on implementation of Basel III capital regulations. The guidelines, inter alia, listed out certain disclosure requirements to improve transparency of regulatory capital and to enhance market discipline. Further, it also indicated that the Reserve Bank will issue appropriate Pillar 3 disclosure norms once the Basel Committee on Banking Supervision (BCBS) has finalised the same. The Basel Committee has since issued its rules text on ˜composition of capital disclosure requirements™.

2.    Accordingly, the formats for Pillar 3 disclosure requirements as introduced under Basel III have been prepared for banks operating in India. These new disclosure requirements will be in addition to the existing Pillar 3 guidance contained in the Master Circular DBOD.No.BP.BC.16 /21.06.001/2012-13 dated July 2, 2012 on Prudential Guidelines on Capital Adequacy and Market Discipline – New Capital Adequacy Framework.

3.    The formats for Pillar 3 disclosure requirement along with guidelines are enclosed. Banks may offer their comments / feedback on the various proposals enumerated therein latest by February 9, 2013 to the Chief General Manager-in-Charge, Reserve Bank of India, Department of Banking Operations and Development, Central Office, 12th Floor, Central Office Building, Shahid Bhagat Singh Marg, Fort, Mumbai- 400 001 or by e-mail.

Yours faithfully,

(Deepak Singhal)
Chief General Manager-in-Charge

Encl.: a/a

Extract of Paragraph 87 of Second Quarter Review of
Monetary Policy for 2012-13

Basel III Disclosure Requirements on Regulatory Capital Composition

87. As announced in the Monetary Policy Statement of April 2012, the Reserve Bank issued guidelines on implementation of Basel III Capital Regulations on May 2, 2012 to all scheduled commercial banks (excluding LABs and RRBs). The Basel Committee on Banking Supervision (BCBS) has finalised proposals on disclosure requirements in respect of the composition of regulatory capital, aimed at improving transparency of regulatory capital reporting as well as market discipline. As these disclosures have to be given effect by national authorities by June 30, 2013, it has been decided:

  • to issue draft guidelines on composition of capital disclosure requirements by end-December 2012.
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