RBI issues Directions on 'Credit Valuation Adjustment (CVA) Framework’

The Reserve Bank of India had issued draft Directions on the ’ Credit Valuation Adjustment (CVA) Framework’ on August 7, 2026 , inviting feedback from stakeholders until August 28, 2026. 2. The draft Directions proposed modifications to the instructions on capital charge for CVA risk for commercial banks. Key revisions included: (i) allowing eligible banks to choose a simpler approach; (ii) increasing the sensitivity of supervisory risk weights for counterparties by sector and credit quality; (iii) clarifying the eligibility and recognition of CVA hedges; and (iv) separate systematic and idios

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