CVA Risk Capital Charge on OTC Derivatives Deferred to April 2014
No longer current — withdrawn, no replacement on file yet
Source: Reserve Bank of India · RBI/2013-14/424 · issued 31 Dec 2013 · ~2 min read
Quick answerRBI has postponed the CVA risk capital charge on OTC derivatives from January 1, 2014 to April 1, 2014, due to delays in mandatory inter-bank forex forward settlement through CCIL. Banks get a three-month reprieve to align systems.
What changed
The effective date for the credit valuation adjustment (CVA) risk capital charge on OTC derivatives has been shifted from January 1, 2014 to April 1, 2014. This deferral is because the mandatory inter-bank forex forward guaranteed settlement through CCIL is taking longer than expected. The capital requirements for banks' exposures to central counterparties (CCPs) remain effective from January 1, 2014 as previously advised.
What it means for you
Banks get additional time until April 2014 to compute and hold capital for CVA risk on OTC derivatives, easing immediate compliance pressure. However, the CCP exposure guidelines kick in from January 2014, so banks must still prepare for that deadline. The delay reflects RBI's pragmatic approach to align regulatory timelines with market infrastructure readiness.
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
Update internal compliance calendars to reflect CVA risk capital charge effective April 1, 2014 instead of January 1, 2014.
Continue preparations for capital requirements on CCP exposures, which remain effective from January 1, 2014.
Review OTC derivative portfolios to ensure CVA capital computation systems are ready by the new deadline.
Communicate the revised timeline to risk management and treasury teams to avoid confusion.
Who it affects
All scheduled commercial banks (excluding Local Area Banks and Regional Rural Banks), Treasury and risk management departments handling OTC derivatives, Banks with significant OTC derivative exposures
❓ Common questions
Regulatory timeline
Stated effective dateeffective from January 1, 2014
Decoded by BankPulse2026-06-18 11:22 IST
repealed_by — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
Status change: withdrawn03 Aug 2026, 04:00 IST
Built from our lineage records — each fact carries its provenance; missing history simply is not shown (never guessed).
Why was the CVA risk capital charge deferred?
The deferral is due to delays in implementing mandatory inter-bank forex forward guaranteed settlement through CCIL, which was expected to be ready by January 2014.
Does this affect the CCP exposure guidelines?
No. The capital requirements for banks' exposures to central counterparties remain effective from January 1, 2014 as per the July 2, 2013 circular.
What is the new effective date for CVA risk capital charge?
The CVA risk capital charge on OTC derivatives will now be effective from April 1, 2014 instead of January 1, 2014.
📜 This document’s life story (1 recorded event, each backed by RBI’s own words)
Repealed byRBI/2025-26/100 — Consolidation of Regulations — Withdrawal of circulars (28 Nov 2025)
RBI’s words: “Official withdrawal register entry #966: DBOD.No.BP.BC.81/21.06.201/2013-14 — "Basel III Capital Regulations - Capital Requirements for Credit Valuation Adjustment Risk on OTC Derivatives and for Bank”
📜 Read the original circular — full text as issued by RBI
RBI/2013-14/424
DBOD.No.BP.BC.81/21.06.201/2013-14
December 31, 2013
The Chairman and Managing Director/
Chief Executives Officer of
All Scheduled Commercial Banks
(Excluding Local Area Banks and Regional Rural Banks)
Madam / Sir,
Basel III Capital Regulations – Capital Requirements for Credit Valuation Adjustment Risk on OTC Derivatives and for Banks’ Exposures to Central Counterparties
Please refer to circular DBOD.No.BP.BC.88/21.06.201/2012-13 dated March 28, 2013 on ‘Implementation of Basel III Capital Regulations in India - Clarifications’ wherein banks were advised, inter alia, that the credit valuation adjustment (CVA) risk capital charge on OTC derivatives would become effective from January 1, 2014. This was done keeping in view the introduction of mandatory inter-bank forex forward guaranteed settlement through a central counterparty i.e. Clearing Corporation of India Ltd. (CCIL). As this process would take some time, it has been decided to implement the CVA risk capital charge on OTC derivatives from April 1, 2014, instead of January 1, 2014.
2. As advised vide circular DBOD.No.BP.BC.28 /21.06.201/2013-14 dated July 2, 2013 , guidelines on Capital Requirements for Banks’ Exposures to Central Counterparties (CCPs) will become effective from January 1, 2014.
Yours faithfully,
(Chandan Sinha)
Principal Chief General Manager
Reproduced for reference with acknowledgment — Source: Reserve Bank of India · RBI/2013-14/424 · issued 31 Dec 2013. The plain-English explanation above is BankPulse’s own independent summary.
Discuss this circular with fellow bankers — reply, upvote what helps, report what doesn’t belong. Be professional; no client data. Views are the commenter’s own, not BankPulse’s.
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=8662&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.
Help us keep this accurate
Found an inaccuracy or have an improvement? Tell us. Every report is reviewed by our team before any change is made — nothing goes live unverified.
Public beta — plain-English informational summaries. Always verify against the official RBI source (circular number cited on every page) before making compliance, credit, treasury, audit, or operational decisions. · Join our WhatsApp channel ↗
BANKPULSE · FREE DAILY BRIEF
Get RBI updates for your role
Every important RBI update, decoded in plain English — for your career, exams & financial awareness.
We collect only your email, name and role, used solely to send your brief — never sold or shared. Withdraw anytime via the unsubscribe link in any email. Independent platform, not affiliated with the RBI. Information, not legal advice.
REPORT AN ERROR · BETA
Spotted an error? Earn 500 BankPulse Credits
Help us stay accurate. If your correction is verified true and approved by our founder, you earn 500 BankPulse Credits — redeemable when the platform monetises.
Reviewed by a human before any credit is awarded. We never change the site from crowd input without verification.
WANT A NEW FEATURE · BETA
What would make BankPulse more useful for you?
Tell us what to build next — a tool, a data view, a role page, anything. We read every suggestion.
Thank you — your ideas directly shape what we build.