What changed
This Master Circular consolidates and updates the previous Basel III guidelines issued up to June 30, 2013, replacing the earlier Master Circular from July 2, 2012. It marks the formal implementation of Basel III in India from April 1, 2013, in a phased manner. The Basel II framework remains relevant for regulatory adjustments and deductions during the transition period ending March 31, 2017.
What it means for you
Indian banks must now comply with the updated Basel III capital regulations as outlined in this circular, which sets higher capital standards. The phased implementation allows banks time to adjust, but they must carefully manage capital planning and deductions using both Basel II and III rules during the transition. This impacts capital adequacy calculations, risk-weighted assets, and disclosure requirements.
What you must do
- Review and implement the updated Basel III capital requirements as per the Master Circular effective April 1, 2013.
- Ensure compliance with the phased implementation schedule and maintain adequate capital ratios.
- Refer to the Basel II circular for regulatory adjustments and deductions until March 31, 2017.
- Update internal policies and reporting systems to align with the consolidated guidelines.
Who it affects
All Scheduled Commercial Banks (excluding Local Area Banks and Regional Rural Banks), Risk management and compliance teams, Capital planning and treasury departments
When did Basel III implementation start in India?
Basel III Capital Regulations were implemented in India with effect from April 1, 2013, in a phased manner as per this Master Circular.
Do we still need to follow Basel II guidelines?
Yes, the Basel II guidelines remain applicable during the transition period for regulatory adjustments and deductions up to March 31, 2017.
Which banks are covered by this circular?
All Scheduled Commercial Banks, excluding Local Area Banks and Regional Rural Banks, are covered.