The RBI will mandate a new, more stringent capital calculation method for derivatives, called SA-CCR, for large banks from April 2027. This move aims to strengthen financial stability by requiring banks to hold more capital against complex financial instruments.
₹25,000 crore
Derivative Outstanding Threshold
⏳ Time Machine
How today’s news fits into the bigger picture
2008-09
Global Financial Crisis Leads to Basel III
The global financial crisis exposed weaknesses in bank capital and , prompting international regulators to develop , which included more stringent requirements for derivative exposures.
2013
Basel III Fully Implemented Globally
The Basel III framework began its phased implementation globally, requiring banks to significantly increase their capital and liquidity buffers, with new approaches to calculating risk-weighted assets.
2019
RBI Issues Draft SA-CCR Guidelines
The RBI released draft guidelines on SA-CCR, inviting feedback from stakeholders, signaling its intent to move towards a more advanced framework for measuring counterparty credit risk for derivatives.
Early 2026
RBI Emphasizes Risk Management
Through various policy statements, the RBI consistently reiterated its focus on strengthening and corporate governance in banks, hinting at upcoming regulatory tightening.
Today
RBI mandates the Standardised Approach for Counterparty Credit Risk (SA-CCR) for banks with derivative exposure of ₹25,000 crore or more.
What happens next?
Affected banks will need to transition to the SA-CCR framework by April 1, 2027, requiring significant overhauls in their risk management and capital allocation systems.
The Reserve Bank of India (RBI) has announced it will implement the **Standardised Approach for Counterparty Credit Risk (SA-CCR)** for banks with derivative exposures of **₹25,000 crore or more**, effective from April 1, 2027. This new framework replaces the existing, less risk-sensitive Current Exposure Method (CEM). SA-CCR is designed to be more sensitive to a bank's actual risk exposures from derivative contracts, potentially increasing the capital requirements for these financial instruments. The move brings Indian banking regulations in line with international Basel III standards, enhancing financial stability and ensuring better risk management, especially for large banks actively engaged in derivative markets.
💭 If you're wondering…
A derivative is a financial contract whose value is 'derived' from an underlying asset, like stocks, bonds, currencies, or commodities. They are used by banks and companies to manage or hedge against risks, or for speculation.
Did this story help?
Official sources
Knowledge Chain — tap a concept