Resources for Basel II Capital Accord (Basel II)

Basel II norms to provide resilience against financial, economic shocks

www.thehindubusinessline.com

The Rs 60,000-crore loan waiver announced in the Union Budget 2008-09 to benefit four crore farmers in the country and the hit that ICICI Bank has taken — marked-to-market losses of $264 million due to exposure to overseas credit derivatives and investments in fixed income assets — together exemplify the predicament of the country’s banking industry, in not being able to price risks properly in their core competence of lending.

No doubt, India is bracing itself for implementation, from March 2009, of the New Capital Adequacy Framework by Banks under Basel-II, with the regulator, the Reserve Bank of India, monitoring the ground-level action by the commercial banks.

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