The Reserve Bank of India on Thursday postponed the final Basel III disclosure guidelines for banks to April 2027, from September 30, 2026, after considering stakeholder feedback. This is intended to give banks time to implement the necessary system and process upgrades.
The RBI also accepted the feedback to align the disclosure requirements with the expected credit loss (ECL) framework for capital charge for credit risk under standardised approach, which are effective from April 2027. Accordingly, it has modified the templates to incorporate ECL guidelines, the central bank said.
The RBI said banks must begin quarterly disclosures with the quarter ending June 30, 2027, and continue every quarter thereafter. For semi-annual disclosures, the first will cover the half-year ended September 30, 2027, with subsequent reports every six months. Annual disclosures will start with the financial year ended March 31, 2028, and thereafter on an annual basis.
The Basel III disclosures include key metric such as risk-based capital ratios, leverage ratio and liquidity standards, bank risk management approach and overview of risk-weighted assets.
“Pillar 3 of the Basel Framework aims to promote market discipline through regulatory disclosure requirements. These requirements enable market participants to access key information relating to a bank’s regulatory capital and risk exposures in order to increase transparency and confidence about a bank’s exposure to risk and the overall adequacy of its regulatory capital,” the RBI said.
The RBI also exempted public sector banks from disclosures on remuneration.
The regulator said banks should have a formal disclosure policy for Pillar 3 data which is approved by the board of directors.
The regulator exempted the disclosure of certain items where revealing them could expose a bank’s position or breach its legal obligations by making proprietary or confidential information public. However, banks should disclose more general information about the subject matter of the requirement.
The RBI emphasises that disclosures should be clear and comprehensive. “Disclosures shall describe a bank’s main activities and all significant risks, supported by relevant underlying data and information. Significant changes in risk exposures between reporting periods should be described, together with the appropriate response by management.”
Following stakeholders’ feedback, the RBI has also reduced the mandatory archive period for Pillar 3 reports on banks’ websites from 10 years to at least five years for prior reporting periods.