modules. the reporting platform being launched today caters to otc inter - bank usd - inr forwards, fx swaps and fcy - inr options. the platform will be upgraded in subsequent phases to capture other inter - bank foreign exchange derivatives namely fcy - inr and fcy - fcy forwards and fx swaps ; fcy - fcy options ; fcy - inr and fcy - fcy currency swaps ; fcy interest rate swap ( irs ), forward rate agreement ( fra ) and caps / floors / collars ; and all / selective client trades in the above foreign exchange derivatives and rupee irs. over the period, it will be integrated with the reporting platform for the credit default swap ( cds ). in its final shape, this repository structure will not only become a warehouse of information on otc derivatives markets but will also provide post trade processing services for the derivatives contracts, thus enhancing the market efficiency. ccil has been advised to develop various post - trade processing services in consultation with market participants. the repository structure will also be used for dissemination of price and volume data to market participants as well as to the general public. bis central bankers ’ speeches globally, the concept of trade repository is evolving. one of the issues being debated is data portability and aggregability among the trade repositories spanning countries and jurisdictions. the otc derivatives market in india mainly comprises domestic counterparties and hence, extra - jurisdictional issues do not have much significance at this point in time. however, we are alive to the needs of uniformity of standards across the globe and our repository framework should have sufficient flexibility to conform to international standards and best practices as they evolve depending upon their relevance in the indian context. this is a task for ccil. it is well recognised that there are significant economies of scope between central counterparty functions and repository functions. yet, the two have some fundamental differences inasmuch as one involves taking risky positions while the other is a pure service function without any exposure. the rbi working group on the subject has accordingly recommended a subsidiary model for the repository function of ccil, to preserve an arm ’ s length between ccp function and repository function of ccil. this is in line with best corporate governance practices. i am sure this aspect will be dealt with by ccil as the reporting system consolidates. to conclude, i am pleased to observe that we are among the first few jurisdictions to have fulfilled the g - 20

to a phenomenal rise in counterparty credit risk. one of the shortcomings of the prevailing basel ii framework is that it does not fully capture the unexpected rise in counterparty exposures under stressed conditions. besides, during the crisis we saw the financial condition of counterparties worsen at the same time when they suffered losses on their derivatives transactions, leading to the so called “ wrong way risk ”. the counterparty credit risk framework of basel ii is being revised to address these concerns. capital adequacy framework : impact on indian banks 10. indian banks are not likely to be significantly impacted by the proposed new capital rules. as on june 30, 2010, the aggregate capital to risk weighted assets ratio of the indian banking system stood at 13. 4 per cent of which tier i capital constituted 9. 3 per cent. although the basel iii norms are yet to be calibrated, it is unlikely that they will be higher than the above figures. as such, we do not expect our banking system to be significantly stretched in meeting the proposed new capital rules both in terms of the overall capital requirement and the quality of capital. 11. indian banks already make most of the deductions from capital now being proposed under basel iii. moreover, our banks do not have re - securitisation exposures and their trading books are small. however, there may be some negative impact arising from shifting some deductions from tier i and tier ii capital to common equity. 12. the proposed changes relating to the counterparty credit risk framework are likely to have capital adequacy implications for some indian banks having large otc bilateral derivatives positions. this underscores the importance of enlarging the derivatives transactions coming within the scope of a multilateral settlement mechanism through central counterparties ( ccps ). ii. containment of financial leverage of banks : bcbs proposals 13. the severity of the downturn during the crisis was accentuated by the excessive financial leverage of large international banks, typically as high as 50 : 1. the basel committee ’ s response to containing this excess is the introduction of a leverage ratio which will be a simple, transparent, non - risk based measure calibrated to act as a credible supplement and backstop to the risk - based requirements. containment of financial leverage of banks – impact on indian banks 14. estimates show that the leverage in the indian banking system is quite moderate. in the bcbs deliberations, we argued that the slr portfolio of our