Banks approach RBI after being directed to raise risk weights to 150%

Dated on: Tuesday 22nd April 2025

Several banks have approached the Reserve Bank of India (RBI) seeking clarification after being directed to raise risk weights on certain commercial real estate (CRE) exposures from 100% to 150%. This adjustment, stemming from RBI's third-quarter inspections and aligned with April 2024 Basel guidelines, impacts loans that were previously rated but have since become unrated, even if the total banking system exposure is under Rs 100 crore. Banks express concern that the increased capital requirements could constrain lending and have engaged the Indian Banks' Association to formally address the issue with the RBI.