FRTB could put Indian banks at competitive disadvantage

Simplified approach could leave local banks with higher capital charges than foreign branches

Reserve Bank of India in Mumbai
Reserve Bank of India
Photo: RBI

Indian banks may face an unlevel playing field if local regulators proceed with early adoption of new market risk capital rules using the most conservative method of calculation. The local branches of foreign banks could end up operating under less restrictive capital requirements, making it difficult for Indian-headquartered firms to compete on the pricing of their trades.

“[Indian banks] believe the regulatory bodies in India have a conservative approach towards risk and capital,” says Anuroop

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