Reserve Bank of India

10.03.2016

Banking

Review of risk weights assigned to sovereign debt

MANU/RMIC/0034/2016

The Reserve Bank of India reviewed and determined risk weights assigned to exposures to domestic sovereigns. Exposure to Central Government, fund and non-fund based, claims will bear a zero risk weight, as will claims guaranteed by the Central Government. Whereas investments in State Government securities will similarly be assessed at zero risk weight, claims guaranteed by State Governments will be assessed at 20 per cent risk weight – and at 100 per cent if the State guaranteed loan remains in default for more than 90 days.

Tags : Risk weight government loan guarantee

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