Banking Laws, Basel, Capital & Risk: Revision and Practice

Connecting All Five Lessons#

1. RBI and Banking Regulation Acts supply the statutory powers and banking business boundaries.
2. Other financial laws clarify payments, deposits, AML, recovery and corporate insolvency.
3. Capital adequacy measures a bank's eligible loss-absorption relative to risks.
4. Basel frameworks supply international prudential thinking adopted domestically by RBI.
5. Risk supervision and PCA identify deterioration and trigger proportionate remedial action.

Law defines authority; prudential rules create safeguards; capital absorbs losses; and supervision tests whether safeguards work in real life.

Common Confusions — Read Before the MCQs#

Important Exam Facts — Quick Revision#

1. RBI Act — 1934; RBI operations began 1935.
2. Banking Regulation Act — 1949.
3. RBI Act Section 22 — banknote issue.
4. Banking Regulation Act Section 22 — banking licence.
5. Banking Regulation Act Section 5(b) — definition of banking.
6. RBI Act Section 42 — scheduled-bank cash reserve.
7. Banking Regulation Act Section 24 — statutory liquidity.
8. Banking Regulation Act Section 35 — RBI inspection.
9. Banking Regulation Act Section 35A — RBI directions.
10. Banking Regulation Act Section 56 — application to co-operative banks.
11. Banking Laws (Amendment) Act, 2025 has staged commencement.
12. NI Act — 1881.
13. DICGC Act — 1961.
14. FEMA — 1999; foreign-exchange management.
15. PMLA — 2002; anti-money-laundering legal framework.
16. SARFAESI — 2002; enforcement of qualifying security interests.
17. RDB Act — 1993; DRT/DRAT.
18. IBC — 2016; insolvency resolution.
19. PSS Act — 2007; payment-system regulation.
20. CRAR = eligible capital divided by RWAs × 100.
21. Core capital = CET1; Tier 1 = CET1 plus eligible AT1.
22. Total capital generally comprises Tier 1 and eligible Tier 2.
23. Capital is not a cash vault balance.
24. Credit, market and operational risks contribute to RWAs under the capital regime.
25. Off-balance-sheet contingent exposures can require capital.
26. CCB = Capital Conservation Buffer, primarily CET1.
27. CCyB = Countercyclical Capital Buffer.
28. LCR concerns short-term stressed liquidity.
29. NSFR concerns stable funding over a longer horizon.
30. Leverage ratio is a non-risk-weighted complement to CRAR.
31. D-SIBs can face additional capital requirements.
32. BCBS is the international Basel standard-setting committee.
33. BIS is the host institution for BCBS in Basel, Switzerland.
34. Basel I — 1988.
35. Basel II — 2004; three pillars.
36. Pillar 1 — minimum capital requirements.
37. Pillar 2 — supervisory review / internal assessment.
38. Pillar 3 — market discipline through disclosure.
39. Basel III — stronger capital, leverage, buffers and liquidity.
40. Basel standards do not automatically become Indian law without domestic implementation.
41. Credit risk = default/non-performance.
42. Market risk = adverse market-price/rate movement.
43. Liquidity risk = inability to meet obligations when due.
44. Operational risk = failed people/processes/systems/external events.
45. Concentration risk = excessive exposure to a common driver.
46. ALCO deals with asset–liability and related risk.
47. ICAAP is internal capital adequacy assessment.
48. RBS is risk-based supervision.
49. PCA is supervisory early intervention, not an automatic shutdown.
50. Revised 2021 SCB PCA framework: capital, asset quality, leverage; check applicability and latest thresholds.

Practice MCQs — Module 14#

Choose one best answer for each question. Questions deliberately test statutory purpose, interpretation and calculations, not only recall. Numeric ratios in calculation questions are explicitly illustrative unless the question identifies a current legal source.

Questions#

1. Which Act primarily constitutes the Reserve Bank of India?#

A. Banking Regulation Act, 1949
B. RBI Act, 1934
C. Companies Act, 2013
D. DICGC Act, 1961

2. RBI commenced operations in which year?#

A. 1934
B. 1935
C. 1949
D. 1956

3. Section 22 of the RBI Act concerns:#

A. banking-company licences
B. banknotes issue
C. promissory notes
D. debt recovery

4. Section 22 of the Banking Regulation Act concerns:#

A. issue of banknotes
B. licence to carry on banking business
C. deposit insurance
D. nomination only

5. Which BR Act provision defines banking?#

A. Section 5(b)
B. Section 24
C. Section 35A
D. Section 45ZB

6. A statutory anchor for scheduled-bank CRR is:#

A. RBI Act Section 42
B. NI Act Section 138
C. IBC Section 7
D. PSS Act Section 4

7. The primary statutory provision associated with SLR is:#

A. Banking Regulation Act Section 24
B. RBI Act Section 22
C. NI Act Section 13
D. Companies Act Section 8

8. RBI's power to inspect a banking company is associated with BR Act:#

A. Section 35
B. Section 5
C. Section 45ZA
D. Section 18 only

9. Which statement about RBI Master Directions is correct?#

A. They replace Parliament
B. They are regulatory instruments grounded in enabling law
C. They are informal exam coaching notes
D. They are necessarily identical to the first circular ever issued

10. The 2025 banking-law amendments included changes to:#

A. deposit nomination framework
B. creation of the Basel Committee
C. India's first RBI Act in 1934
D. the first cheque ever issued

11. The law most directly associated with negotiable instruments and cheque dishonour is:#

A. PMLA, 2002
B. NI Act, 1881
C. FEMA, 1999
D. PSS Act, 2007

12. Which Act is linked to bank deposit insurance?#

A. DICGC Act, 1961
B. Companies Act, 2013
C. SARFAESI Act, 2002
D. PSS Act, 2007

13. Which law primarily governs foreign-exchange management?#

A. FEMA, 1999
B. NI Act, 1881
C. RDB Act, 1993
D. PSS Act, 2007

14. PMLA, 2002 is most closely related to:#

A. money laundering and AML compliance
B. cheque crossing
C. capital conservation buffer
D. payment of bank dividends

15. Which law is specifically associated with enforcement of qualifying security interests?#

A. SARFAESI Act
B. DICGC Act
C. RBI Act Section 22 only
D. IRDA Act

16. Which statute provides the framework for Debt Recovery Tribunals?#

A. RDB Act, 1993
B. FEMA
C. RBI Act
D. PSS Act

17. Corporate Insolvency Resolution Process is associated with:#

A. IBC, 2016
B. RBI Act, 1934 only
C. NI Act, 1881
D. DICGC Act, 1961

18. A payment-system operator is principally governed through the legal framework of:#

A. Payment and Settlement Systems Act, 2007
B. Negotiable Instruments Act only
C. NABARD Act only
D. RDB Act only

19. CRAR means:#

A. cash reserves divided by deposits
B. eligible regulatory capital divided by RWAs
C. gross profits divided by revenue
D. total deposits divided by equity

20. Eligible capital of ₹90 crore and RWAs ₹750 crore produce a CRAR of:#

A. 9%
B. 10%
C. 12%
D. 15%

21. A ₹100 crore exposure with an illustrative 20% risk weight creates an RWA of:#

A. ₹5 crore
B. ₹20 crore
C. ₹80 crore
D. ₹120 crore

22. Which is generally a major RWA risk category?#

A. Credit risk
B. Customer age alone
C. Branch paint colour
D. Number of bank holidays

23. Which statement about off-balance-sheet guarantees is correct?#

A. They can create capital requirements
B. They can never create risk
C. They are always customer deposits
D. They are excluded from all regulation

24. Which capital has the highest-quality ordinary equity character?#

A. CET1
B. Deposits
C. All unsecured loans
D. All customer insurance premiums

25. Tier 1 capital generally comprises:#

A. CET1 plus eligible AT1
B. Only Tier 2
C. Deposits plus CRR
D. SLR plus current account balance

26. Total regulatory capital generally comprises:#

A. Tier 1 plus eligible Tier 2
B. Customer deposits only
C. NPA provisions only
D. Cash at branches only

27. If capital remains unchanged while RWAs rise, the CRAR:#

A. normally falls
B. always rises
C. stays fixed by law
D. becomes the LCR

28. An extra CET1 cushion above minimum requirements is known as:#

A. CCB
B. CRR
C. IFSC
D. CTS

29. Countercyclical Capital Buffer is especially linked to:#

A. system-wide cyclical credit risk
B. only cheque endorsement
C. only DICGC premiums
D. one bank's stationery purchase

30. The leverage ratio is mainly a complement to risk-weighted capital because it:#

A. uses a broader exposure measure rather than standard RWA denominator
B. is the same as NPA percentage
C. counts only annual profit
D. replaces every other risk control

31. LCR primarily addresses:#

A. short-term stress liquidity
B. holder-in-due-course status
C. deposit nomination
D. capital instrument write-down

32. NSFR primarily concerns:#

A. structural funding stability
B. signature verification on cheques
C. only agricultural crops
D. automatic bank merger

33. Basel I is conventionally associated with which year?#

A. 1949
B. 1976
C. 1988
D. 2016

34. Basel II's defining organising principle is:#

A. Three pillars
B. One currency
C. Two bank account types
D. Fixed 0% risk for every loan

35. Basel II Pillar 1 emphasises:#

A. Minimum capital requirements
B. political elections
C. solely consumer advertising
D. only banknotes issue

36. Basel II Pillar 2 concerns:#

A. Supervisory review and internal capital assessment
B. marketing a new ATM card
C. nomination priority
D. printing banknotes

37. Basel II Pillar 3 relates to:#

A. Market discipline through disclosure
B. only cash reserve
C. only RBI note printing
D. branch architectural design

38. BCBS stands for:#

A. Basel Committee on Banking Supervision
B. Bank Credit Bureau Service
C. Basel Currency Booking Standard
D. Bharat Capital Banking Scheme

39. Basel standards become enforceable in India principally through:#

A. Domestic law and regulator implementation
B. automatic BIS prosecution of a branch
C. any coaching institute
D. mere mention on social media

40. Basel III is particularly associated with:#

A. Higher-quality capital, buffers, leverage and liquidity standards
B. removal of all capital
C. replacing RBI with IMF
D. abolition of prudential supervision

41. The risk of borrower non-payment is:#

A. Credit risk
B. Only market risk
C. Only technology risk
D. Only reputational risk

42. The risk that bank bond holdings fall in value due to yield changes is commonly:#

A. Market/interest-rate risk
B. Deposit insurance
C. Only salary risk
D. No risk at all

43. Sudden depositor withdrawal pressure primarily creates:#

A. Funding liquidity risk
B. Only cheque crossing risk
C. Only demographic risk
D. None if the bank holds capital

44. An internal processing failure causing loss is an example of:#

A. Operational risk
B. Only sovereign credit risk
C. Only inflation
D. Only policy repo transmission

45. ALCO is most closely concerned with:#

A. Asset–liability and liquidity/interest-rate risk
B. cheque-endorsement criminal law
C. nomination forms only
D. SBI's statutory creation

46. ICAAP means:#

A. Internal Capital Adequacy Assessment Process
B. International Cheque Approval and Payment
C. Indian Capital Allocation Auto Portal
D. Insured Cash Amount Accounting Policy

47. PCA is best described as:#

A. Early supervisory corrective intervention
B. automatic bank liquidation
C. retail EMI reminder service
D. international foreign exchange transfer method

48. The revised RBI SCB PCA framework identified which main dimensions?#

A. Capital, asset quality, leverage
B. Only profitability
C. Only the number of branches
D. Only currency circulation

49. Which institution is excluded from the particular revised 2021 SCB PCA framework?#

A. Regional Rural Bank
B. Covered ordinary Scheduled Commercial Bank
C. An eligible private bank within scope
D. An eligible public sector bank within scope

50. Which statement about PCA is correct?#

A. PCA does not automatically cancel the banking licence
B. PCA is always closure on the same day
C. Every NPA immediately causes PCA
D. RBI loses all supervision after PCA

Answers with explanations#

1. B — RBI Act, 1934. The RBI Act, 1934 is the principal constituting law for the central bank.

2. B — 1935. RBI began operations on 1 April 1935; 1934 is the year of its parent Act.

3. B — banknotes issue. Section 22 of the RBI Act concerns RBI's right to issue banknotes; Section 22 of the Banking Regulation Act is about licences.

4. B — licence to carry on banking business. Do not confuse similarly numbered sections in different statutes.

5. A — Section 5(b). Section 5(b) provides the statutory definition of banking.

6. A — RBI Act Section 42. RBI Act Section 42 provides the scheduled-bank reserve framework; CRR is not capital adequacy.

7. A — Banking Regulation Act Section 24. Section 24 of the Banking Regulation Act is the broad SLR statutory anchor.

8. A — Section 35. Section 35 concerns inspection; Section 35A concerns RBI directions.

9. B — They are regulatory instruments grounded in enabling law. RBI directions draw legal force from statutory authority; they are not Acts of Parliament.

10. A — deposit nomination framework. The 2025 amending Act revised nomination and several governance/administrative areas, with staged commencement.

11. B — NI Act, 1881. The Negotiable Instruments Act addresses promissory notes, bills and cheques, including conditional Section 138 liability.

12. A — DICGC Act, 1961. DICGC operates under its governing Act; eligibility and monetary cover require current verification.

13. A — FEMA, 1999. FEMA provides the foreign-exchange management framework.

14. A — money laundering and AML compliance. PMLA is central to anti-money-laundering law, together with rules and regulator directions.

15. A — SARFAESI Act. SARFAESI provides a secured-creditor enforcement mechanism subject to conditions/exemptions.

16. A — RDB Act, 1993. The Recovery of Debts and Bankruptcy Act establishes the DRT/DRAT architecture.

17. A — IBC, 2016. IBC provides a collective insolvency resolution framework, not ordinary unilateral security enforcement.

18. A — Payment and Settlement Systems Act, 2007. The PSS Act establishes RBI's statutory role over covered payment systems.

19. B — eligible regulatory capital divided by RWAs. Capital to Risk-weighted Assets Ratio measures qualifying loss-absorbing capital relative to weighted exposures.

20. C — 12%. 90 ÷ 750 × 100 = 12%.

21. B — ₹20 crore. For a simplified exposure, RWA = amount × risk weight = ₹20 crore.

22. A — Credit risk. Credit, market and operational risk are core prudential RWA categories.

23. A — They can create capital requirements. Contingent facilities can be converted into credit-equivalent exposure for capital purposes.

24. A — CET1. CET1 is the strongest core going-concern capital layer.

25. A — CET1 plus eligible AT1. Under the Basel capital stack, Tier 1 consists of CET1 and qualifying Additional Tier 1.

26. A — Tier 1 plus eligible Tier 2. Eligible total capital contains Tier 1 and Tier 2 subject to prudential criteria and deductions.

27. A — normally falls. Increasing the denominator decreases the ratio when numerator stays fixed.

28. A — CCB. Capital Conservation Buffer requires additional high-quality capital above core minima.

29. A — system-wide cyclical credit risk. CCyB helps address excessive systemic credit build-up and can vary by policy.

30. A — uses a broader exposure measure rather than standard RWA denominator. It is a supplementary non-risk-weighted backstop.

31. A — short-term stress liquidity. LCR relates liquid assets to short-stress net outflows.

32. A — structural funding stability. NSFR compares stable funding available and required over a longer horizon.

33. C — 1988. The Basel I capital accord was agreed in 1988.

34. A — Three pillars. Basel II is known for Pillar 1 minimum capital, Pillar 2 supervisory review, Pillar 3 disclosures.

35. A — Minimum capital requirements. Pillar 1 specifies minimum risk-based capital requirements.

36. A — Supervisory review and internal capital assessment. Pillar 2 requires banks to assess capital adequacy broadly and undergo supervisory review.

37. A — Market discipline through disclosure. Risk/capital disclosures help outside participants assess the bank.

38. A — Basel Committee on Banking Supervision. BCBS is the international prudential banking standard setter housed at BIS.

39. A — Domestic law and regulator implementation. BCBS has no supranational law-enforcement authority over Indian banks.

40. A — Higher-quality capital, buffers, leverage and liquidity standards. Basel III was developed after crisis-era lessons about capital, funding and systemic risk.

41. A — Credit risk. A failure to pay contractual debt is a credit-risk event.

42. A — Market/interest-rate risk. Bond prices generally fall as yields rise, subject to valuation/portfolio specifics.

43. A — Funding liquidity risk. Capital and liquidity are separate; a solvent bank can face cash-flow stress.

44. A — Operational risk. Operational risk includes process, people, system and external-event failures.

45. A — Asset–liability and liquidity/interest-rate risk. Asset–Liability Committee oversees major ALM/funding and interest-rate exposures.

46. A — Internal Capital Adequacy Assessment Process. ICAAP addresses internal assessment of risk/capital adequacy beyond simple minimum compliance.

47. A — Early supervisory corrective intervention. Prompt Corrective Action is a structured supervisory response to deteriorating bank health.

48. A — Capital, asset quality, leverage. The revised 2021 framework for covered SCBs centres capital, asset quality and leverage.

49. A — Regional Rural Bank. The framework excludes RRBs, SFBs and payments banks; other rules/supervision still apply.

50. A — PCA does not automatically cancel the banking licence. PCA can require restrictions and remedial actions without automatically winding up the bank.

Glossary — Module 14#

Additional Tier 1 (AT1) — Qualifying capital instruments, distinct from CET1, with specified subordination and loss-absorption terms.

ALCO — Asset–Liability Committee, responsible for governance of key asset–liability, funding and interest-rate positions.

ALM — Asset–Liability Management: managing maturity, repricing, currency and liquidity mismatches.

Banking Regulation Act — Indian law chiefly regulating banking business, licensing, inspection and other controls.

Basel Committee on Banking Supervision (BCBS) — International prudential-banking standard setter associated with BIS; no direct supranational enforcement power.

Basel I — International 1988 capital accord known for standardised risk-based capital framework.

Basel II — 2004 international framework organised around minimum capital, supervisory review and market discipline.

Basel III — Post-global-financial-crisis reforms emphasising capital quality, buffers, leverage, liquidity and system resilience.

Bank Capital — Eligible loss-absorbing financing available to support the bank's obligations and unexpected losses, as recognised by regulation.

BIS — Bank for International Settlements; international financial-cooperation institution in Basel.

Capital Adequacy — Sufficient qualifying regulatory capital relative to banking risks.

CCB — Capital Conservation Buffer, an additional high-quality capital cushion over the base minimum.

CCyB — Countercyclical Capital Buffer, an additional policy buffer tied to system-wide cyclical risks.

CET1 — Common Equity Tier 1, the highest-quality core regulatory capital category.

Concentration Risk — Vulnerability from excessive exposure to a common borrower, group, sector, region or risk factor.

CRAR — Capital to Risk-weighted Assets Ratio (also commonly called CAR).

CRR — Cash Reserve Ratio: cash-reserve requirement on eligible bank liabilities.

Credit Risk — Risk of loss arising from a counterparty's failure to meet obligations.

D-SIB — Domestic Systemically Important Bank, a designation that can involve extra capital safeguards.

DRT — Debt Recovery Tribunal for covered recovery matters.

FEMA — Foreign Exchange Management Act, 1999.

HQLA — High-Quality Liquid Assets recognised under applicable liquidity rules.

IBC — Insolvency and Bankruptcy Code, 2016.

ICAAP — Internal Capital Adequacy Assessment Process.

IRRBB — Interest Rate Risk in the Banking Book.

LCR — Liquidity Coverage Ratio, a short-horizon stressed-liquidity metric.

Leverage Ratio — Tier 1 capital measured against a broader, specified leverage-exposure base.

Market Risk — Losses from adverse movements in market prices, yields, exchange rates or other market variables.

Master Circular — RBI consolidation of instructions as of an applicable publication date.

Master Direction — RBI regulatory direction issued under statutory authority, updated or superseded as required.

NPA — Non-Performing Asset; a loan/asset classification, not the same as institution-level PCA.

NSFR — Net Stable Funding Ratio; a longer-term stable-funding measure.

Operational Risk — Risk of loss from failed processes, people, systems or external events, including covered legal risk.

PCA — Prompt Corrective Action: structured early supervisory intervention for entities covered by a particular RBI PCA framework.

Pillar 1 — Basel minimum capital requirements.

Pillar 2 — Basel supervisory review and internal capital adequacy assessment.

Pillar 3 — Basel market discipline through disclosures.

Prudential Regulation — Rules intended to ensure safe/sound financial institutions and protect the financial system.

RBI Act — Reserve Bank of India Act, 1934, establishing RBI and defining central-banking and other powers.

Risk-Based Supervision — Supervision prioritising vulnerabilities and controls according to an institution's risk profile.

RWA — Risk-Weighted Assets, the prudential denominator reflecting prescribed exposure risk treatment.

SARFAESI — Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

SLR — Statutory Liquidity Ratio, a requirement to hold prescribed liquid assets.

Stress Test — Assessment of bank resilience under challenging hypothetical scenarios.

Tier 1 Capital — CET1 plus eligible AT1, designed to absorb losses on a going-concern basis.

Tier 2 Capital — Additional eligible capital with gone-concern loss-absorption characteristics.

Official Sources and Further Reading#

Primary official sources were prioritised over commercial exam-preparation material. Do not assume an older master circular remains the latest direction. The dated website layer must check subsequent amendments and bank-category applicability before refreshing values.

1. India Code — Reserve Bank of India Act, 1934#

• Statutory record: https://www.indiacode.nic.in/indiacode/handle/123456789/2398
• Consolidated Act PDF: https://www.indiacode.nic.in/bitstream/123456789/2398/1/a1934-2.pdf
• Used for RBI incorporation, management, banknote issue, Government banking, scheduled-bank reserves, monetary-policy and NBFC statutory framework.

2. India Code — Banking Regulation Act, 1949#

• Consolidated Act PDF: https://www.indiacode.nic.in/bitstream/123456789/1885/1/A1949-10.pdf
• Used for statutory banking definition, licensing, business restrictions, statutory liquidity, inspection, directions, supervision and nomination.

3. Government of India / PIB — Banking Laws (Amendment) Act, 2025#

• Official commencement and nomination changes: https://www.pib.gov.in/PressReleaseIframePage.aspx?PRID=2181734
• Official reform overview: https://www.pib.gov.in/PressNoteDetails.aspx?ModuleId=3&NoteId=156313&lang=2&reg=48
• Used to distinguish a 2025 amending Act, its policy changes and staged commencement dates. Verify any new commencement notifications before updating the website.

4. RBI — Commercial Banks Prudential Norms on Capital Adequacy Directions, 2025#

• RBI's current updating master-direction URL: https://www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=13159
• Used for bank-category scope, CET1/Tier 1/total CRAR, CCB, RWA structure and other capital safeguards. As displayed in the research session, RBI lists the Direction updated as on 7 October 2026. Its detailed requirements should always be read in the live Direction rather than copied from an out-of-date summary.

5. RBI — Basel III Capital Regulations Master Circular (earlier consolidation)#

• https://www.rbi.org.in/Scripts/BS_ViewMasterCirculars.aspx?Id=12815
• Used to verify the sequence of consolidations and applicable exceptions. This April 2025 circular is not automatically more current than the subsequently updated 2025 Direction.

6. RBI — Handbook on Regulations at a Glance#

• https://website.rbi.org.in/documents/d/rbi/handbookg27022025d0f3f53f5d3c4310a6bb2f8ac2175d3a
• Useful bank-category comparison, including differences among scheduled commercial banks, SFBs, RRBs, co-operative banks and NBFCs. If there is a conflict, the latest applicable RBI direction/notification governs.

7. RBI — Prompt Corrective Action Framework for Scheduled Commercial Banks#

• Official circular identifier: RBI/2021-22/118, DOS.CO.PPG.SEC.No.4/11.01.005/2021-22, dated 2 November 2021, effective January 2022.
• RBI Annual Report context: https://www.rbi.org.in/scripts/AnnualReportPublications.aspx?Id=1355
• Used for PCA's corrective purpose and the relevant covered/excluded institution classes. The scheme's thresholds may change; confirm the operative framework before updating a numeric table.

8. BIS / Basel Committee — History and Basel Framework#

• Basel Committee history: https://www.bis.org/committees/bcbs/history
• Basel Framework: https://www.bis.org/committees/bcbs/basel-framework
• Basel standards overview: https://www.bis.org/committees/bcbs/standards
• Basel Committee policy-development/legal status: https://www.bis.org/committees/bcbs/policy-development
• Used for Basel chronology, three pillars, capital/liquidity reforms and the fact that Basel standards require national adoption.

9. India Code — Central financial laws registry#

• Ministry of Finance Acts index: https://www.indiacode.nic.in/handle/123456789/1362/browse?order=ASC&rpp=95&type=ministry&value=Finance
• Used as an official cross-check on NI Act, DICGC Act, RRB Act, recovery, FEMA, PMLA, SARFAESI, IBC and related statutes, with relevant statutes accessible through the index.

10. RBI — Capital for operational risk (direction and effective-date caveat)#

• https://www.rbi.org.in/scripts/FS_Notification.aspx?Id=12520
• This RBI 2023 direction explicitly indicated that implementation/effective date for the new operational-risk approach would be separately communicated. Do not present any proposed/replacement methodology as fully implemented solely because its direction was published. Use current operative capital direction for the bank type.

Source quality and maintenance#

• Prioritise RBI, India Code, Government/PIB and BIS/BCBS.
• Distinguish a statutory text, a regulatory amendment, a draft proposal and a final operational direction.
• Every current numerical capital/PCA statement must have a source, applicability group and asOfDate.
• Do not treat coaching websites as authoritative legal/regulatory sources.
• This lesson is examination education, not professional legal or investment advice.