While RBI has been tweaking the guidelines in response to situations as they emerged, there was a widening gap between our norms and the global standards and practices. A comprehensive review was therefore overdue and called for. 10  23.
The Discussion Paper (DP) proposes radical changes which are designed to give greater flexibility to banks in the management of their investment portfolio while addressing concerns through enhanced disclosure. The idea is to align the prudential framework with global standards, while retaining elements which are germane to the domestic context.