Don’t miss the latest developments in business and finance.

IBA studying banks' Basel-II readiness

Image
Rajendra Palande Mumbai
Last Updated : Feb 25 2013 | 11:50 PM IST
IBA is conducting a survey in collaboration with Aptivaa Consultants.
 
The Indian Banks' Association (IBA) has embarked on an exercise to assess the preparedness of the domestic banks for being Basel-II compliant from April 2007.
 
The IBA is conducting a 'readiness assessment survey' of member banks in collaboration with Aptivaa Consultants, a consulting firm engaged globally in determining plans and priorities relating to Basel-II.
 
Basel-II is an improved framework on capital adequacy standards prepared by the Basel-based Bank for International Settlements' Committee on Banking Supervision.
 
The revised framework requires banks to allocate capital for operational risk and adopt improved risk management systems, apart from capital adequacy for market risk.
 
The assessment will be made with the help of direct interactions with banks as well as on the basis of information received in reply to a framed questionnaire.
 
The Reserve Bank of India (RBI) has issued draft guidelines on implementation of Basel-II norms with effect from March 31, 2007. The Basel committee has said each national supervisor should carefully consider the benefits of the revised framework in the context of its domestic banking system when developing a timetable and approach to the implementation of the norms.
 
The RBI will conduct a parallel run of Basel-II norms from April 1, 2006, basically to estimate the revised framework's impact on banks' balance sheets.
 
On representations from banks, the RBI recently allowed them to issue innovative hybrid debt instruments and will soon come out with guidelines on issue of preference shares for raising both tier-I and tier-II capital.

 

More From This Section

First Published: Feb 18 2006 | 12:00 AM IST

Next Story