Resources for Basel II Capital Accord (Basel II)

Basel II norms to limit credit to SSIs: ICRIER

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Implementation of Basel II norms by the banking sector will reduce credit availability to small scale industries (SSIs), besides adding to their cost of fund, says a study.

"Under the proposed Basel II norms, banks would be discouraged to lend to SSI that is not rated because a loan to an unrated entity will attract 100 per cent risk-weight," says an ICRIER working paper on 'Capital Adequacy Regime in India: An Overview.'

The Basel II norms, which seeks to tighten lending operations by banks, will come into force for banks having international operations by March 2008 and for others by March 2009.

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