RBI pushes Basel pillar 3 disclosure by 6 months to Apr 2027

Mumbai, Jul 30 (PTI) The Reserve Bank on Thursday pushed the implementation of the amended Basel Pillar 3 disclosures by six months to April 1, 2027, accepting stakeholder feedback.

In the amended directions issued to lenders, the central bank also decided to exempt state-owned banks from disclosing remunerations of their chief executives, accepting feedback that they are government-mandated ones.

“Given the difficulties expressed by the stakeholders in implementation of Basel Pillar 3 disclosures, the date of implementation has been deferred to April 1, 2027.

“The disclosure templates have been suitably modified to incorporate the guidelines on ECL and capital charge for credit risk under the standardised approach,” the central bank said.

Earlier,

the RBI had planned to ask banks to come out with the disclosures for the quarter ended September 30 this year.

In their feedback, the stakeholders suggested deferring the implementation of the guidelines to April 1, 2027, to enable them to undertake suitable system and process changes.

It has also been suggested to align the disclosure requirements with Expected Credit Loss (ECL) and the framework for capital charge for credit risk under the standardised approach, which are effective from April 1, 2027, the RBI added.

Accepting the feedback, the RBI said, “The disclosure templates have been suitably modified to incorporate the guidelines on ECL and capital charge for credit risk under the standardised approach” and put in place a further set of clarifications.

The first quarterly disclosure will be made for the three months ending June 30, 2027, and thereafter, it should be on a quarterly basis.

For semi-annual disclosures, the first disclosure shall be made for the half-year ended September 30, 2027, and for annual disclosures, the first disclosure shall be made for the financial year ended March 31, 2028.

Partially accepting another piece of feedback on the time after the publishing of results for making disclosures, the central bank said Pillar 3 should be made within a week of declaring the results for the period up to March 31, 2029. However, for the financial year beginning April 1, 2029, a bank shall publish such disclosures concurrently with its financial reports for the corresponding period.

A bank shall make available on its website an archive for at least five years of Pillar 3 reports relating to prior reporting periods against ten years proposed earlier, the RBI said.

Making one more change, it also said that one or more senior officers of a bank at Board level should attest in writing that the Pillar 3 disclosures have been prepared in accordance with the Board-agreed internal control processes and in case of foreign banks operating in India in branch mode, one or more officers being a part of the local management committee must attest in writing that Pillar 3 disclosures have been prepared in accordance with the Board-agreed internal control processes.

It said that the Basel Pillar 3 disclosure templates on market risk, operational risk, counterparty credit risk, credit valuation adjustment, and leverage ratio for commercial banks shall be issued separately. PTI AA BAL BAL