The Reserve Bank of India, vide its revised Second Amendment Directions dated March 30, 2026, has introduced a targeted modification to the capital adequacy framework in alignment with the revised credit and concentration risk norms. Specifically, the Directions clarify the prudential treatment of Irrevocable Payment Commitments (IPCs) issued by banks to clearing corporations on behalf of clients, categorising such exposures as financial guarantees with a credit conversion factor (CCF) of 100%. However, capital is required to be maintained only on the portion of such exposure that qualifies as Capital Market Exposure (CME) under the relevant guidelines, with a prescribed risk weight of 125% applied to such amount. This amendment ensures consistency in capital computation with the revised CME framework and will come into effect from July 1, 2026 or earlier upon adoption by banks.Link – https://rbidocs.rbi.org.in/rdocs/notification/PDFs/NT256237C65319A514EED99F9587E2676FC90.PDF
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