Informist, Friday, Dec 29, 2023

--RBI: EXIM Bk to be national development bk under Basel III framework 
--RBI: NaBFID to be national development bk under Basel III framework 

MUMBAI – The Reserve Bank of India today decided that All India Financial Institutions, also known as AIFIs, must be considered national development banks under the net stable funding ratio computation, the central bank said in a press release.

Under the RBI's regulation, there are five All India Financial Institutions – the Export-Import Bank of India, the National Bank for Agriculture and Rural Development, the National Bank for Financing Infrastructure and Development, the National Housing Bank, and the Small Industries Development Bank of India.

The RBI also said that unencumbered loans to these development banks with residual maturity of at least one year would qualify for a 35% or lower risk weight and would be assigned a required stable funding factor of 65%, against 100% currently.

This circular is applicable to all scheduled commercial banks and will come into force with immediate effect. 

In September, the central bank had introduced norms on the Basel III capital framework, fund-raising, exposure guidelines, and norms on classification and valuation of investment portfolios for All India Financial Institutions, which will come into effect from Apr 1.

According to the September circular, these institutions must maintain a common equity tier-I capital ratio of 5.5%, minimum tier-I capital ratio of 7%, and minimum total capital ratio of 9%.  End

Reported by Subhana Shaikh

Edited by Avishek Dutta

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