The RBI said the revised framework is aimed at improving the quality and consistency of disclosures made by banks, enabling investors and market participants to better assess the financial strength and risk profile of lenders.
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The Reserve Bank of India (RBI) has proposed a sharper disclosure regime for banks under the Basel III framework, with the aim to enhance transparency and strengthen market discipline through more detailed and standardised reporting of financial and risk indicators.In a consultation paper on revised Pillar 3 disclosure norms issued on Tuesday, the central bank said lenders would be required to publish granular information every quarter on capital adequacy, liquidity, leverage and risk exposure in a uniform format. The proposed framework will cover key metrics such as Common Equity Tier 1 (CET1) capital, total capital ratio, risk-weighted assets (RWAs), leverage ratio, liquidity coverage ratio (LCR) and net stable funding ratio (NSFR).Banks will also have to provide narrative explanations for major changes in these parameters from one reporting period to another, including the factors driving such movements and the management response to evolving risks.The RBI said the revised framework is aimed at improving the quality and consistency of disclosures made by banks, enabling investors and market participants to better assess the financial strength and risk profile of lenders.“Regulatory Disclosure Section”Under the proposal, banks must create a dedicated “Regulatory Disclosure Section” on their websites to host all Pillar 3 disclosures. They will also be required to maintain an archive of past disclosure reports for at least ten years.The central bank added that Pillar 3 disclosures should be published simultaneously with a bank’s financial results for the relevant period. In cases where no financial statements are issued for a particular reporting cycle, the disclosures must still be released as soon as practicable.The draft norms also outline qualitative disclosure requirements, asking banks to explain their processes for identifying, measuring and managing risks, alongside quantitative data.However, the RBI has allowed some flexibility by permitting banks to withhold disclosures considered immaterial or not meaningful to users. In such cases, lenders must provide a clear explanation for omitting the information.The RBI has invited stakeholder comments on the draft framework by June 2. The final guidelines are proposed to come into effect from the quarter ending September 30, 2026Published on May 19, 2026
