India has stricter regulatory norms: Basel

Why is it in the news?
  • The Basel Committee on Banking Supervision said RBI’s rules are stricter in some areas.
  • Basel panel on banking supervision has 45 members comprising central banks and officials from some 28 jurisdictions.
More in the news
    • The assessment was conducted by the Regulatory Consistency Assessment Programme (RCAP), part of the Basel committee.
    • The Basel large exposures framework requires banks to identify third parties that may constitute an additional risk factor inherent in the structure itself rather than in underlying assets. 
    • Findings of the Basel panel:
      (1) Overall, as of 7 June 2019, the large exposures regulations in India are assessed as compliant with the Basel large exposures framework.
      (2) This is highest possible grade.
      (3) The large exposures framework applies to all scheduled commercial banks apart from regional rural banks.
      (4) The framework became partially effective since April 2019 and the same circular was modified in June 2019.
      • Basel norms:
        (1) Basel III Norms : Basel III  is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09.
        (2) The measures aim to strengthen the regulation, supervision and risk management of banks.
        (3) The capital norms recommend Capital Adequacy ratio (CAR) be increased to 8 per cent internationally, while in India it is 9 per cent. 
        Source
        The Hindu.




        Posted by Jawwad Kazi on 10th Jul 2019
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