What changed
The RBI deleted the existing sub-paragraph 10(5)(ii) under the 'Exposures' section of the Financial Statements Directions and inserted a new sub-paragraph (iia) with a comprehensive table for capital market exposure. The new table includes 11 main line items (i to xi) covering direct investments, advances for shares, credit to intermediaries, acquisition finance, bridge finance, underwriting, irrevocable payment commitments, and trade exposures, with sub-items under acquisition finance.
What it means for you
Banks will now need to report capital market exposures in a more granular and standardized format, aligning with the updated Credit Facilities Directions. This enhances transparency and consistency in disclosures, helping regulators and stakeholders better assess risk concentrations. Lenders must ensure their reporting systems capture all the new sub-categories accurately.
What you must do
- Update your Notes to Accounts template to replace the old capital market exposure table with the new format containing 11 main line items (i to xi).
- Align internal data systems to capture each sub-category (e.g., AIFs, REITs, InvITs, bridge finance, irrevocable payment commitments).
- Train reporting teams on the revised definitions and computation method as per the Concentration Risk Management and Credit Facilities Directions.
- Implement the changes by the earlier of the date you adopt the provisions of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026 or April 1, 2026.
Who it affects
All commercial banks in India, Bank finance and reporting departments, Risk management and compliance teams, Overseas branches of Indian banks
When do these new disclosure requirements take effect?
The amendments apply from the date a bank decides to implement the provisions of the Reserve Bank of India (Commercial Banks – Credit Facilities) Amendment Directions, 2026, or from April 1, 2026, whichever is earlier.
What are the key new items in the capital market exposure table?
The table now includes 11 main items (i to xi) such as direct investment in equity, preference shares, convertible bonds, units of REITs/InvITs/AIFs, advances for share investment, credit to capital market intermediaries, acquisition finance, bridge finance, underwriting commitments, irrevocable payment commitments, and trade exposures, with sub-items under acquisition finance.
How should banks compute the capital market exposure?
The exposure must be computed in terms of the Reserve Bank of India (Commercial Banks - Concentration Risk Management) Directions, 2025 read with the Reserve Bank of India (Commercial Banks – Credit Facilities) Directions, 2025.