Basel II in India: Compliance and Challenges

Authors:
Publisher website
Google Scholar
Abstract
The stability of International banking system has emerged as a key concern for regulators in rapidly changing global banking scenario. In order to strengthen the soundness and stability of banks, Basel Committee on Banking Supervision (BCBS) came out with a comprehensive, flexible and risk sensitive framework known as Basel II. This paper attempts to assess in detail the role of Reserve Bank of India, in implementation of Basel II framework in Indian banking Scenario. For this purpose, Annual reports of Reserve Bank of India for the period 2002–03 to 2009–2010 have been analyzed in detail. The study has indicated that RBI has taken significant and structural initiatives to implement the Basel II norms in Indian financial system. It also gives glimpse of New Capital Adequacy framework to strengthen the banking structure. The study further throws light on challenges faced by Indian banking industry for the purpose of envisaged implementation of Basel II Accord.