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Committee set up to assist banking sector to apply Basel III norms

Mar 8, 2014 17:30 IST

Reserve Bank of India (RBI) on 7 March 2014 announced to set up a committee under the Financial Stability and Development Council (FSDC).

The committee would set the guidelines for the banking sector to comply with Basel-III capital norms.
The decision was taken at a sub-committee meeting of FSDC. The meeting was chaired by Reserve Bank of India (RBI) Governor Raghuram Rajan.

Main highlights are as follows

•    The implementation of the non-legislative recommendations of the Financial Sector Legislative Reforms Commission (FSLRC)

•    The issue of setting up a repository for providing investors with a single view of all financial asset classes.

•    The ways to suggest the capital requirements of the banking sector over the next five years in view of the Basel-III regulations and requirements for supervisory capital.

•    Issues of greater harmonisation of regulations across sectors for similar activities were also taken up.

•    Also, it discussed about ways for setting up an effective resolution regime for the financial sector.

About Basel III norms

imageA comprehensive set of reform measures designed to improve the regulation, supervision and risk management within the banking sector. The Basel Committee on Banking Supervision published the first version of Basel III in late 2009, giving banks approximately three years to satisfy all requirements. Largely in response to the credit crisis, banks are required to maintain proper leverage ratios and meet certain capital requirements.

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