The new Basel framework provides that significant minority and majority investments in commercial entities, which exceed certain materiality levels, are to be deducted from Banks capital”; that means materiality levels of 10% of the bank’s capital for individual significant investments in commercial entities and 60% of the bank’s capital for the aggregate of such investments. The amount exceeding this threshold would be risk weighted at 1250%.

Investments held below the 10% threshold will be risk weighted at 100% under the Standardized Approach, and as per section 7.2.1 for the IRB Approaches.

(Refer Paragraph 35 of International Convergence of Capital Measurement and Capital Standards – June 2006 & Para 90 of Basel III: A global regulatory framework for more resilient banks and banking systems)