Reserve Bank of India's Draft Guidelines on Basle advanced measurement approach for calculating operational risk capital charge

The Reserve Bank of India has released draft guidelines on advanced measurement approach (AMA) for calculating operational risk capital charge. Comments/feedback on the draft guidelines have been requested from the Indian Banking industry before February 7.

The Reserve Bank had announced timeline for implementation of advanced approaches for computation of regulatory capital under the Basel II framework in India in July 2009. The guidelines for the standardized approach (TSA)/alternate standardized approach (ASA) for operational risk were issued in March 2010 and those for internal models approach (IMA) for market risk were issued in April 2010. The Reserve Bank had, in July 7, 2009, advised banks that they can, among other things, apply for migrating to Advanced Measurement Approach (AMA) for Operational Risk from April 1, 2012 onwards.