BJP lawmaker Nishikant Dubey Tuesday said Indian banks should not adhere to international capital adequacy norms as it is leading to more provisioning of capital and is one of the reason for mounting non-performing assets.
Dubey, who is a member of Parliament's standing committee on finance, said he has raised the issue with the Finance Ministry.
Blaming Basel norms for poor condition of the country's banks, Dubey said,"Basel committee is a private entity and India started implementing its norms during UPA regime. And it is one of the reasons for mounting NPAs."
He also suggested that India should come out of International Financial Reporting Standards, usually called IFRS. As per the Companies Act, 2013, certain class of companies are required to comply with IFRS-convergent Indian Accounting Standards.
Basel Committee on Banking Supervision (BCBS), based in Basel in Switzerland, is the primary global standard setter for the prudential regulation of banks and provides a forum for regular cooperation on banking supervisory matters. Its 45 members comprise central banks and bank supervisors from 28 jurisdictions.
Global capital to risk norms, called Basel III capital regulation, are being implemented in phased manner by Reserve Bank of India since April 1, 2013. They are to be fully implemented as on March 31, 2019.
As per the norms, banks have to maintain a minimum common equity ratio of 8 per cent and total capital ratio of 11.5 per cent by March 2019.
Over the last few fiscals, India's banking sector has been troubled by mounting non-performing assets and bad debts.
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