Indian banks can now avail forex swap facility until the end of the financial year 2009/10 as the reserve Bank of India has approved its extension and increased the interest rate ceiling on foreign currency export credit with immediate effect. The move would help to mitigate the credit problem in the midst of tight liquidity conditions.

Banks can develop their own model, instead of standardized approach, to estimate the probability of default for individual clients or groups of clients. However, banks have discretion to adopt the advanced approaches but they need to take regulatory approval from reserve bank to adopt it. Banks can apply for internal models approach
(IMA) by April 1, 2010 to the apex bank. Similarly, for operational risk, banks can apply by April 1, 2010 to graduate from standardized approach.

All public and private sector banks, with overseas exposure, can avail credit swap facility for three months starting from March 31,
2010, from June 30, 2009. The schedule for restructuring of commercial real estate exposures has also been extended March 31, 2009 against January 31, 2009.