Resources for Basel II Capital Accord (Basel II)

Basel norms for banks may not be delayed

economictimes.indiatimes.com

Banking regulator the Reserve Bank of India (RBI) said on Thursday it was not considering to extend the deadline for banks to implement the new Basel norms. Under the new norms, banks will have to set aside more capital to tackle a variety of risks.

According to RBI deputy governor V Leeladhar, local commercial banks with overseas offices have to adopt the Basel II norms latest by March 2008. Banks, which only have the local presence, have more breathing time, until March 2009 to fulfil these norms.

Mr Leeladhar revealed this at a Ficci-IBA seminar that Indian banks appeared to be well prepared to adhere to the Basel norms which have been set out by a committee constituted by the Bank for International Settlements (BIS), which is regarded as the central bank of all central banks.

Mr Leeladhar added that the new capital adequacy norms might increase the overall regulatory capital requirement unless the operational risk is offset by the capital relief available for credit risk. For this, banks will have to plan their capital raising programme.

View the Resource

Share or bookmarklet this web page at: