RBI/2007-2008/270
DBOD.No.BP.BC.67 /21.06.001/2007-08

March 31, 2008

The Chairman and Chief Executive Officer
All Commercial Banks
(excluding Local Area Banks and Regional Rural Banks)

Dear Sir,

Prudential Guidelines on Capital Adequacy and Market Discipline –
Implementation of New Capital Adequacy Framework (NCAF)  –
Amendments

Please refer to our circular DBOD.No.BP.BC.90/20.06.001/2006-07 dated April 27, 2007 on the captioned subject. The banks had also been advised to undertake a parallel run of the new capital adequacy framework (as per the draft guidelines of February 15, 2005) with a view to ensuring smooth transition to the Revised Framework.

2.  In the light of clarifications sought by banks during the course of implementation of the parallel run of the NCAF, the guidelines have been reviewed, and it has been decided to effect certain amendments as detailed in the Annex.  All other provisions of the April 27, 2007 circular, except to the extent modified as per the Annex, remain unchanged.  The amendments will come into force with immediate effect.

Yours faithfully,

(Prashant Saran)
Chief General Manager-in-Charge