HomeCirculars › RBI/2010-11/258

Off-Balance Sheet Netting Norms Extended to AIFIs

Current · Source: Reserve Bank of India · RBI/2010-11/258 · issued FY 2010-11 · ~1 min read
Quick answerRBI extends bilateral netting guidelines for counterparty credit exposures to select All-India Financial Institutions (Exim Bank, NABARD, NHB, SIDBI), effective immediately, aligning them with bank norms.
The rule, in the simplest words
How it plays out — a real example

A risk management officer at Exim Bank in Mumbai will now need to review and update the bank's internal policies to ensure they are applying the same bilateral netting norms as regular banks to all off-balance sheet exposures, such as guarantees and derivatives, to maintain compliance with the new regulatory framework. This officer will work closely with the compliance department to train staff on the new counterparty credit risk calculation methods. By doing so, Exim Bank will be able to manage its risks more effectively and maintain its financial stability.

What changed

RBI circular DBOD.FID.FIC.No 8/01.02.00/2010-11 dated November 2, 2010, advises that prudential norms for off-balance sheet exposure and bilateral netting of counterparty credit exposures, originally issued to banks on October 1, 2010, now apply mutatis mutandis to select AIFIs. This extends the same regulatory framework to Exim Bank, NABARD, NHB, and SIDBI.

What it means for you

AIFIs must now follow the same prudential norms as banks for netting counterparty credit exposures in off-balance sheet items, impacting their capital adequacy calculations. This ensures consistency in risk management across financial institutions and may require adjustments in their reporting and compliance systems.

What you must do

Who it affects

Exim Bank, NABARD, NHB, SIDBI, Risk management teams at AIFIs, Compliance departments at AIFIs

❓ Common questions

What is bilateral netting of counterparty credit exposures?

It allows institutions to offset positive and negative replacement costs with the same counterparty to calculate a single net exposure, reducing capital requirements.

When do these norms take effect for AIFIs?

The circular is dated November 2, 2010, and applies immediately from that date, as it references the bank circular issued on October 1, 2010.

Which AIFIs are covered by this circular?

The circular is addressed to select All-India Term Lending and Refinancing Institutions: Exim Bank, NABARD, NHB, and SIDBI.

📜 Read the original circular — full text as issued by RBI
RBI/2010-11/258 DBOD.FID.FIC.No 8 /01.02.00 /2010-11 November 2 , 2010 The CEOs of select All-India Term Lending and Refinancing Institutions (Exim Bank, NABARD, NHB and SIDBI) Dear Sir, Prudential Norms for Off Balance Sheet Exposure-Bilateral netting of counterparty credit exposures Please  find  enclosed  circular  DBOD  No. BP .BC .48 / 21.06.001 /  2010-11 dated  October 1, 2010 on the above subject. In this connection, it  is  advised that the above guidelines issued to banks, shall mutatis mutandis apply to the select All-India Financial Institutions (AIFIs) Yours faithfully, (Vinay Baijal) Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2010-11/258 · issued FY 2010-11. The plain-English explanation above is BankPulse’s own independent summary.
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Who does what — compliance checklist
🏦 Branch Manager
  • Train relevant staff on the new counterparty credit risk calculation methods.
💻 IT / Systems
  • Update internal policies and systems to apply bilateral netting norms to all off-balance sheet exposures.
  • Ensure compliance with capital adequacy requirements under the revised framework.
📜 Compliance
  • Review the enclosed bank circular (DBOD No. BP.BC.48/21.06.001/2010-11) for detailed netting guidelines.
Grouped from the action items above — a single circular may involve more than one team.
Worked example & action-note template

Example: if you are a Compliance officer at a bank this circular applies to (Exim Bank, NABARD, NHB, SIDBI, Risk management teams at AIFIs, Compliance departments at AIFIs), your first concrete step on “Off-Balance Sheet Netting Norms Extended to AIFIs” is: “Review the enclosed bank circular (DBOD No. BP.BC.48/21.06.001/2010-11) for detailed netting guidelines.” (RBI issued this FY 2010-11).

  1. Circular: RBI/2010-11/258 -- Off-Balance Sheet Netting Norms Extended to AIFIs
  2. Issued: FY 2010-11
  3. Action required: Review the enclosed bank circular (DBOD No. BP.BC.48/21.06.001/2010-11) for detailed netting guidelines.
  4. Action required: Update internal policies and systems to apply bilateral netting norms to all off-balance sheet exposures.
  5. Action required: Train relevant staff on the new counterparty credit risk calculation methods.
  6. Action required: Ensure compliance with capital adequacy requirements under the revised framework.
  7. Owner: ____________ Target date: ____________
  8. Board/committee approval needed? Y / N
  9. Evidence filed in compliance register on: ____________
Built only from this circular’s own published fields — not legal advice; always confirm against the official RBI source.

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BankPulse Compliance Evidence Pack — generated 03 Aug 2026 · status cross-checked against RBI’s official withdrawal register (refreshed weekly).
Official RBI source: https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=6076&Mode=0 — Plain-English summary by BankPulse (bankpulse.ai), reviewed by our expert reviewer, CA Amit Jain. Independent platform, not affiliated with the Reserve Bank of India; is our own plain-English paraphrase, not RBI’s original wording.
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