Basel III Objectives Of Basel Bank

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BASEL NORMS Introduction: Basel is a city in Switzerland which is also the headquarters of Bureau of International Settlement BIS fosters co-operation among central banks with a common goal of financial stability and common standards of banking regulations. Bank for International Settlements (BIS) was established on 17 May 1930, is the world's oldest international financial organisation. It has two representative offices in the Hong Kong and in Mexico. In total BIS has sixty member countries from all over the world and covers approximately ninety five per-cent of the world GDP. Objectives: The set of the agreement by the BCBS (BASEL COMMITTEE ON BANKING SUPERVISION), which mainly focuses on risks to banks and the financial system are called…show more content…
Basel 3 procedures aim to: → Develop the banking sector's ability to absorb shocks arising from financial and economic stress, whatever the source → Develop risk management and governance → Improve bank’s transparency and disclosures Hence we can say that Basel III strategies are targeted to develop the capability of banks to tolerate periods of economic and financial stress as the new strategies are more rigid than the earlier obligation for capital and liquidity in the banking segment. How will Basel III requirements affect Indian banks? The Basel III that is to be employed by banks in India as per the course of action issued by RBI from time to time will be perplexing task not only for the banks but also for government of India. It is estimated that Indian national banks will be required to raise RS 600000 CRS in external capital in next 9 years or so i.e. by 2020 (The estimations differ from organisation to organisation). Development of capital to such an extent will affect the return on investment on the equity of these banks particularly public sector banks. However, only solace for Indian banks is the fact that traditionally they have conserved their core and overall capital well in excess of the supervisory

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