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Indian banks not prepared to implement Basel-II by 2006: FICCI
Mumbai, Sept 23: Indian banks are not prepared to implement stringent Basel-II norms including that of capital adequacy and non-performing assets in toto by 2006, according to a FICCI survey.
Mumbai, Sept 23: Indian banks are not prepared to implement stringent Basel-II norms including that of capital adequacy and non-performing assets in toto by 2006, according to a FICCI survey.
The banking system has a long way to go for providing
full market access to foreign players, FICCI secretary general
Amit Mitra said quoting the survey released here today.
More than half the respondents felt banks would require two years beyond 2006 to meet the Basel norms and overwhelming 87 per cent of respondents maintained that provision for capital changes to address operational risks would put pressure on capital adequacy requirements. Similarly, the provisioning would adversely affect the credit flow to industry as banks would become more risk averse, Mitra said referring to survey findings.
The survey covered 216 key decision makers from foreign, private, public sector banks and corporates.
The internal rating based on recommendations of Basel II norms would make Indian banks more resilient to risk and help them face competition better, the survey said. On access to foreign players to Indian banking market, the survey said banking industry would need 2-3 years to gear up to meet challenges of full market access to overseas entities.
Bureau Report
More than half the respondents felt banks would require two years beyond 2006 to meet the Basel norms and overwhelming 87 per cent of respondents maintained that provision for capital changes to address operational risks would put pressure on capital adequacy requirements. Similarly, the provisioning would adversely affect the credit flow to industry as banks would become more risk averse, Mitra said referring to survey findings.
The survey covered 216 key decision makers from foreign, private, public sector banks and corporates.
The internal rating based on recommendations of Basel II norms would make Indian banks more resilient to risk and help them face competition better, the survey said. On access to foreign players to Indian banking market, the survey said banking industry would need 2-3 years to gear up to meet challenges of full market access to overseas entities.
Bureau Report