Home › Circulars › RBI/2012-13/508

RBI withdraws Basel II parallel run and prudential floor

No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2012-13/508 · issued 27 May 2013 · ~2 min read
Quick answerRBI has withdrawn the parallel run and prudential floor for Basel II implementation. Banks no longer need to maintain Basel II capital above 80% of Basel I requirements or submit parallel run reports.

What changed

RBI withdrew the parallel run and prudential floor for Basel II implementation, effective immediately. Banks are no longer required to ensure Basel II minimum capital exceeds 80% of Basel I capital for credit and market risks. The requirement to submit parallel run reports to RBI has also been removed.

What it means for you

Banks can now fully transition to Basel II capital adequacy without the earlier floor constraint, simplifying capital planning. This reduces compliance burden as parallel run reporting is no longer needed. Lenders gain more flexibility in managing capital ratios under Basel II.

Historical instruction — do not use for current compliance. This is what was required at the time; it no longer reflects current RBI requirements. If no replacement rule is linked above, that only means none is recorded on our register yet — it does not prove no later applicable rule exists. Confirm on the official RBI source below.

What banks were required to do at the time

Who it affects

All scheduled commercial banks (excluding LABs and RRBs), Bank compliance and risk management teams, Bank capital planning departments

❓ Common questions

Regulatory timeline

Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).

What was the prudential floor that has been withdrawn?

The prudential floor required banks to keep their Basel II minimum capital requirement above 80% of the minimum capital computed under Basel I for credit and market risks. This floor has now been removed.

Do banks still need to submit parallel run reports to RBI?

No, the requirement to submit parallel run reports has been withdrawn. Banks are no longer required to furnish these reports in the earlier prescribed format.

When did this change take effect?

The withdrawal was effective from May 27, 2013, the date of the circular. The parallel run and prudential floor were in place until March 31, 2013, subject to review, and have now been withdrawn.

📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed by RBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #1151: DBOD.BP.BC.No.95/21.06.001/2012-13 — "Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) - Parallel Run a”
📜 Read the original circular — full text as issued by RBI
RBI/2012-13/508 DBOD.BP.BC. No.95/21.06.001/2012-13 May 27, 2013 The Chairman and Managing Director/ Chief Executive Officer of All Scheduled Commercial Banks (excluding LABs and RRBs) Dear Sir Prudential Guidelines on Capital Adequacy and Market Discipline - New Capital Adequacy Framework (NCAF) - Parallel Run and Prudential Floor Please refer to our circular DBOD.BP.BC.No.71/21.06.001/2010-11 dated December 31, 2010 on the above subject, in terms of which banks were advised to continue with the parallel run for a period of three years, till March 31, 2013, subject to review. Banks were also advised to ensure that their Basel II minimum capital requirement continues to be higher than the prudential floor of 80% of the minimum capital requirement computed as per Basel I framework for credit and market risks. 2. The matter has been reviewed and the parallel run and prudential floor for implementation of Basel II vis-à-vis Basel I is hereby withdrawn. 3. In view of the above, banks are not required to furnish a copy of parallel run report to Reserve Bank of India in the reporting format prescribed in para 2.4 read with Annex 1 of the Master Circular on Prudential Guidelines on Capital Adequacy and Market Discipline- New Capital Adequacy Framework (NCAF) DBOD.No.BP.BC.16/21.06.001/ 2012-13 dated July 2, 2012 . Yours faithfully, (Chandan Sinha) Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2012-13/508 · issued 27 May 2013. The plain-English explanation above is BankPulse’s own independent summary.
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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=7996&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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