RBI finalizes CVA framework, allows simpler approach for banks

The Reserve Bank of India issued final Directions on the Credit Valuation Adjustment (CVA) Framework, following a draft released in August 2026. The framework revises capital charges for CVA risk, offering eligible banks a simpler approach, increasing sensitivity of supervisory risk weights by sector and credit quality, and clarifying hedge eligibility. This regulatory change affects bank capital requirements and could influence lending and derivatives activity in India.