The Reserve Bank of India, vide its revised Amendment Directions dated March 30, 2026, has aligned the Concentration Risk Management framework with the revised credit facilities regime by introducing key definitional linkages (such as acquisition finance, bridge finance, CMIs, collateral, and primary security) and refining the scope of capital market exposure (CME). A comprehensive redefinition of CME has been undertaken to include both fund-based and non-fund-based exposures such as investments, advances against securities, acquisition finance, bridge finance, credit facilities to CMIs, underwriting commitments, and irrevocable payment commitments (IPCs). The Directions prescribe revised prudential ceilings, capping aggregate CME at 40% of the bank’s eligible capital base, direct exposures at 20%, and acquisition finance exposure at 20%, along with requirements for intra-day exposure limits. Certain exposures (e.g., investments in subsidiaries, critical financial infrastructure, and specified refinancing portions) have been excluded from CME computation. The framework also introduces detailed norms for computation and netting of exposures, including treatment of derivatives and IPCs, while rationalising earlier provisions through deletions and restructuring. These amendments will come into effect from July 1, 2026 or earlier upon adoption, ensuring consistency with the revised credit regulations and strengthening prudential oversight of banks’ capital market exposures.
Link – https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT255325083CBEDA648DEA31224CE9EF7EDC8.PDF
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