RBI proposed revised Basel III Pillar 3 disclosure framework requiring banks to publish quarterly granular information on capital adequacy, leverage, liquidity and risk exposure. Banks must disclose CET1 capital, total capital, RWAs, leverage ratio, LCR and NSFR in uniform format. Draft circular invites comments by June 2, 2025, with final directions effective from September 30, 2026 quarter. Banks must maintain dedicated website sections with ten-year archives of disclosure reports.

Basel III's Pillar 3 mandates market discipline through transparency. While Pillar 1 sets minimum capital requirements and Pillar 2 covers supervisory review, Pillar 3 ensures public disclosure of risk information. RBI's enhanced framework addresses gaps in current disclosures where banks often provided boilerplate information without meaningful risk insights. The quarterly disclosure requirement covers key prudential metrics - CET1 ratio measuring core capital strength, leverage ratio preventing excessive borrowing, LCR ensuring short-term liquidity, and NSFR for long-term funding stability. Banks must explain quarter-on-quarter changes and management responses to risk variations. This transparency helps investors, depositors, and regulators assess bank health more accurately. The ten-year archive requirement ensures historical trend analysis. Exemptions exist for immaterial exposures, but banks must justify non-disclosure. This aligns Indian banking with global Basel standards, enhancing market confidence and enabling better risk pricing by stakeholders.