The Reserve Bank of India (RBI) has released updated amendment directions introducing a revised Basel Pillar 3 disclosure framework for commercial banks, small finance banks, and payments banks. The final regulatory framework has been issued after evaluating stakeholder comments received on the draft directions circulated in May 2026.
The revised disclosure framework is intended to strengthen market discipline by enhancing the quality, consistency, and transparency of public disclosures related to banks' capital adequacy, financial position, and risk exposures. The updated requirements are applicable to all regulated banking entities covered under the framework.
Under the new norms, Basel Pillar 3 disclosures are required at the highest consolidated level of a banking group. Banking entities that are not the top consolidated entity must continue to publish Pillar 3 disclosures on a standalone basis.
The RBI has also mandated that every bank maintain a comprehensive disclosure policy approved by its Board of Directors. The policy must outline governance arrangements, disclosure controls, and internal review mechanisms. Key aspects of the policy are required to be included in the annual Pillar 3 disclosure report.
The amendment directions encompass prudential regulations relating to capital adequacy, governance standards, asset-liability management, and financial statement presentation for commercial banks, small finance banks, and payments banks.
Additionally, the RBI has stated that separate Basel Pillar 3 disclosure templates covering market risk, operational risk, counterparty credit risk, credit valuation adjustment (CVA), and leverage ratio for commercial banks will be issued at a later stage. The central bank noted that stakeholder feedback received on these proposed templates will be reviewed and incorporated, wherever appropriate, before their final release. CA Sansaar