New Delhi, Sept. 29 -- From 1 April 2027, Indian banks will have to maintain higher levels of capital for their market risk exposures. Banks hold financial securities such as government treasuries, corporate bonds, listed equites and commodity notes.

The value of these securities changes daily based on market prices; i.e., the value of such securities are marked-to-market. The potential loss in value attributable to market moves is market risk. Equity capital must be kept for absorbing such losses.

On 21 September 2026, the Reserve Bank of India (RBI) issued its final directions on the minimum capital banks need to cover market risk. This timely intervention by RBI will align India with the Basel 3 market risk framework. Despite occasio...