Background:

In October 2025, The Reserve Bank of India (RBI) released the draft RBI (Scheduled Commercial Banks – Asset Classification, Provisioning and Income Recognition) Directions, taking into account the feedback received on the earlier Discussion Paper issued on ECL based provisioning and the recommendations of the External Working Group constituted for this purpose. This marks a pivotal transition from the traditional incurred loss model to a forward-looking Expected Credit Loss (ECL) framework, aligned with the globally accepted IFRS 9 standards. The Basel Committee on Banking Supervision in its final ‘Basel III framework permits two broad methodologies for calculating risk-based capital requirements for credit risk, viz., the Standardized Approach (SA) and the Internal Ratings Based approach (IRB). RBI has decided to implement the Standardized Approach (SA) for credit risk for banks under its jurisdiction to ensure prudent and credible calculation of risk-weighted assets that would facilitate arriving at capital ratios for banks in a comparable and risk-sensitive manner.

Objective:

Recognizing the strategic and operational significance of these two policy changes proposed by RBI, this virtual conference is being organized to provide senior leaders with a comprehensive overview of the regulatory expectations outlined in these draft guidelines and to discuss key implementation imperatives.

Conference Highlights:

• Regulator’s Perspective on the ECL and Capital Requirements
• Expected Credit Loss: Implementation Imperatives and Adoption
• Credit Risk under Standardised Approach: Computation of Capital Charge for Credit Risk and various Credit Risk Mitigation