RBI Recognises CareEdge Global IFSC Ratings for Basel III Compliance
CareEdge Global IFSC Ratings, the international arm of Credit Analysis & Research Ltd, has now been recognised by the Reserve Bank of India (RBI) for capital adequacy calculation under Basel III norms. This move, notified on 8th July 2025, expands the list of approved external credit assessment institutions (ECAIs) and boosts India’s IFSC ecosystem.
This blog explains the significance of this RBI notification, the benefits for banks and investors, and the compliance angle under the Basel III framework.
What Is the Basel III Framework?
Basel III is a global regulatory standard issued by the Basel Committee on Banking Supervision. It strengthens bank capital requirements and introduces new regulatory requirements on:
- Capital adequacy
- Liquidity risk
- Leverage ratio
In India, RBI has implemented Basel III norms since 2013. To calculate risk-weighted assets (RWA), banks use credit ratings from RBI-approved ECAIs.
CareEdge Global IFSC: Now an RBI-Recognised ECAI
As per RBI Notification DOR.MRG.REC.34/21.06.007/2025-26 dated 8 July 2025, CareEdge Global IFSC Limited has been added to the list of six eligible ECAIs.
Implications:
- Banks and NBFCs can now use ratings from CareEdge Global IFSC for credit risk weighting.
- This helps calculate minimum capital requirement more accurately under Basel III.
- It promotes the internationalisation of Indian rating agencies through GIFT City.
🔗 Official RBI Notification – rbi.org.in
List of RBI-Approved ECAIs under Basel III
| Sl. No. | Recognised ECAI | Status |
|---|---|---|
| 1 | CRISIL Ratings Ltd. | Domestic |
| 2 | ICRA Ltd. | Domestic |
| 3 | India Ratings and Research Pvt. Ltd. | Domestic |
| 4 | CARE Ratings Ltd. | Domestic |
| 5 | Brickwork Ratings India Pvt. Ltd. | Domestic |
| 6 | CareEdge Global IFSC Ltd. | IFSC / International |
Key Benefits for Financial Institutions
- Better Credit Access: International exposure rated by an IFSC-based ECAI makes cross-border lending easier.
- Regulatory Clarity: RBI alignment ensures ratings are Basel III-compliant.
- Capital Efficiency: Risk weight adjustments using valid ratings help optimise capital use.
Legal and Compliance Angle
This change is backed by:
- RBI Master Circular on Basel III norms
- Section 35A of the Banking Regulation Act, 1949 – gives RBI power to issue such directions
- IFSC Guidelines issued by IFSCA (GIFT City regulator)
This recognition also aligns with India’s GIFT City objectives: creating a global financial hub with regulatory parity.
Expert Insight: Why This Matters Now
According to financial experts, this step:
“Signals RBI’s intent to integrate IFSC entities into the core financial infrastructure, opening doors for GIFT-based players to participate in domestic capital calculation systems.”
How to Use CareEdge Global Ratings for Basel III
For banks and NBFCs operating under RBI’s capital regulations:
- Accept ratings from CareEdge Global IFSC for exposures.
- Map ratings to RBI’s standardised risk weights.
- Maintain documentation for supervisory review.
This is particularly useful for external commercial borrowings (ECBs), offshore exposures, and structured finance deals.
FAQs
Q1. Is CareEdge Global the same as CARE Ratings India?
A: It is the international arm of CARE Ratings, set up in GIFT City to serve global markets.
Q2. Can cooperative banks also use these ratings?
A: Only if they fall under Basel III applicability, which is usually for scheduled commercial banks.
Q3. Where can I find the latest ECAI list?
A: Refer to RBI’s updated notifications or their official site.
Summary
CareEdge Global IFSC Ratings are now accepted by RBI for Basel III capital adequacy rules. This supports Indian banks in risk-weighting exposures using GIFT City-based credit assessments.
Final Thoughts
With this move, RBI has taken a firm step toward mainstreaming GIFT City rating agencies in the banking system. For Indian financial institutions, this brings greater flexibility, global alignment, and regulatory support in managing credit risk under Basel III.
If you’re a bank, NBFC, or compliance officer navigating Basel III norms, Efiletax can help simplify your tax and regulatory workload.