Regulatory Alerts2026-08-07
Added
RBI invites public comments on the draft Directions on Credit Valuation Adjustment (CVA) Framework
The Reserve Bank of India has released draft Directions revising the Credit Valuation Adjustment framework to permit banks to adopt the basic approach (BA-CVA), including full or reduced versions, or a simplified calculation for banks with insignificant volumes of non-centrally cleared derivatives. The revised instructions allow eligible banks to choose a simpler approach, clarify the eligibility and recognition of CVA hedges, increase the sensitivity of supervisory risk weights for counterparties by sector and credit quality, and separate systematic and idiosyncratic CVA risk components in the full BA-CVA calculation. Comments on the draft Directions are invited from Regulated Entities, market participants, and other interested parties until August 28, 2026.