RBI/2008-09/ 307
DBOD.No.BP.BC.92 /21.06.001/2008-09

December 4, 2008

All Scheduled Commercial Banks
(excluding Local Area Banks and Regional Rural Banks)

Dear Sirs, 

Implementation of the New Capital Adequacy Framework (NCAF) –
Parallel run reporting format – Monitoring of Prudential Floor

Please refer to paragraph 2.4 of our ‘Master Circular – Prudential Guidelines on Capital Adequacy and Market Discipline – Implementation of NCAF’, issued vide letter DBOD.No.BP.BC.11/21.06.001/2008-09 dated July 1, 2008, containing existing instructions regarding parallel run of the revised framework, introduced  with effect from June, 2006.

2. The banks had been separately advised in May 2006 to cover certain broad elements while submitting their parallel run reports to their respective Boards, every quarter, for reviewing the results of the parallel run as also to furnish a copy of the report to the RBI.  In the light of the experience gained in the parallel run of the NCAF over the last two years, and also with a view to ensuring a degree of standardisation in their reporting to the Boards and to the RBI, a reporting format (as per the Annex) has since been prepared for adoption by all the banks. The reporting in the format is expected to continue till March 2011/ March 2012, as per the date of migration to the NCAF by a bank, for monitoring compliance with Prudential Floors, envisaged in paragraph 4.1.2 of the aforesaid circular on NCAF. 

3. The banks are advised to adopt the format for reporting to their Boards with effect from the quarter ending December 31, 2008.  The format represents the minimum reporting requirements to the Board and banks could provide such additional information to their Boards as may be considered necessary. A copy of the quarterly report, duly approved by the Boards in the format prescribed, may also be sent to the Chief General Manager-in-Charge, Department of Banking Supervision, Central Office, Reserve Bank of India, World Trade Centre, Cuffe Parade, Coloba, Mumbai – 400 005, so as to reach RBI not later than a month from the end of the quarter to which it relates.  In  cases, where there the Board’s approval of the report is likely to take longer time, the banks may furnish an advance copy of the report to the RBI, to be followed by the comments/remarks/guidance of the Board, if any, on the report.

Yours faithfully,

(P. Vijay Bhaskar)
Chief General Manager