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Review of Prudential Norms –Risk Weights for Exposures to Corporates, AFCs and NBFC-IFCs

RBI/2016-17/44
DBR.No.BP.BC.6/21.06.001/2016-17

August 25, 2016

All Scheduled Commercial Banks
(Excluding Local Area Banks and
Regional Rural Banks)

Dear Sir/Madam,

Review of Prudential Norms –Risk Weights for Exposures to Corporates, AFCs and NBFC-IFCs

Please refer to para 5.8 of Master Circular on Basel III capital regulations dated July 1, 2015 on exposures to the captioned entities. At present unrated exposures to these entities attract a risk weight of 100 per cent. On a review, it has now been decided to make the following modifications to the risk weights applicable to unrated exposures:

  • With effect from June 30, 2017, all unrated claims on corporates, AFCs, and NBFC-IFCs having aggregate exposure from banking system of more than INR 200 crore will attract a risk weight of 150%.
  • However, claims on corporates, AFCs, and NBFC-IFCs having aggregate exposure from banking system of more than INR 100 crore which were rated earlier and subsequently have become unrated will attract a risk weight of 150% with immediate effect.

Yours faithfully,

(Ajay Kumar Choudhary)
Chief General Manager

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