From 7 October 2026, RBI mandates a 2% risk weight on specified QCCP trade exposures for small finance banks under revised capital adequacy norms.
RBI Imposes 2% Risk Weight on QCCP Exposures for SFBs
The Reserve Bank of India (RBI) issued the Sixth Amendment Directions, 2026, mandating a uniform 2% risk weight on specified trade exposures of Small Finance Banks (SFBs) to Qualifying Central Counterparties (QCCPs), effective from 7 October 2026. The revision aligns SFBs with international risk calibration standards under Basel III.
The directions cover exposures arising from cleared derivatives and eligible financial transactions. This risk-weighting reduces capital charges compared to higher-risk bilateral exposures, promoting central clearing. The framework includes documentation, margining, and default preparedness standards for counterparties.
The move supports financial stability by incentivising central clearing mechanisms. SFBs must adjust internal capital models and reporting templates accordingly. Regulatory teams should monitor further guidance on eligible QCCPs and transaction types.