•  Issuance of Irrevocable Payment Commitments by banks to stock exchanges: The issue of banks undertaking custodian services issuing Irrevocable Payment Commitment to exchanges on behalf of Mutual Funds/FIIs has been engaging our attention for some time. These IPCs were in the nature of non-fund based credit facility but were not being included for computation of Capital Market Exposure (CME).
After giving multiple extensions to banks in this regard, it was recently decided that the potential risk on T+1 would be reckoned at 50% of the settlement amount. Also this amount would be reckoned as CME at the end of T+1 if margin payment / early pay in does not come in. IPC would also be reckoned for the purpose of capital adequacy.