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RBI/2021-22/81 DOR.MRG.39/21.04.157/2021-22 August 06, 2021 All Banks Madam / Dear Sir, Prudential Norms for Off-Balance Sheet Exposures of Banks Restructuring of derivative contracts Please refer to paragraph 2.2 of ourcircular DBOD.No.BP.BC.57/21.04.157/2008-09 dated October 13, 2008, in terms of which any change in any of the parameters of the original derivative contract would be treated as a restructuring. 2. In this context, it is clarified that change in the terms of a
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FAQ :
The notification clarifies that changing the reference rate of a derivative contract due to the transition from LIBOR to an alternative rate will not be considered a restructuring, as long as other contract terms stay the same.
Previously, any alteration to any parameter of an original derivative contract was treated as a restructuring.
No, only if the change in reference rate due to LIBOR transition is the sole change and all other parameters of the original contract remain unchanged.
A change in the terms of a derivative contract solely because of a change in the reference rate, necessitated by the transition from LIBOR to an alternative reference rate, is not considered restructuring.
This clarification was issued by the Reserve Bank of India (RBI).
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Source : https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12141&Mode=0