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RBI to soon finalise policy approach for new basle accord
New Delhi, Aug 10: Reserve Bank of India will soon finalise the policy approach to the proposed new basle capital accord, aimed at aligning capital with the banking risks to promote safety and soundness of banks.
New Delhi, Aug 10: Reserve Bank of India will soon finalise the policy approach to the proposed new basle capital accord, aimed at aligning capital with the banking risks to
promote safety and soundness of banks.
"RBI is collecting information from banks and a detailed
study of the data will be undertaken before finalising the
policy approach," official sources told a news agency, adding that it
would improve the comfort level of banks.
The move comes after bank for international settlements (BIS) had asked RBI for vital inputs to arrive at a country-specific risk weightage in the revised basle accord on capital adequacy for banks, slated to be in place by 2006.
"We have asked all the regulators, including Reserve Bank of India for the Quantitative Impact Study (QIS) to help in calibrating proposals," a top BIS official confirmed. The inputs were vital for the BIS in view of the need for increased capital adequacy in the Asian region due to wide use of real estate as collateral for business loans.
QIS would help in crunching the numbers and provide an opportunity for dialogue between regulators and banks in the respective countries, he said.
The country-specific risk weightage model would depend on inputs from the respective countries including India, as risk perceptions varied among countries and region, he added. The main objective of revised basle accord -- whose three basic pillars were minimum capital requirements, supervisory review process and market discipline -- was enhanced risk sensitivity for the banking system.
Bureau Report
The move comes after bank for international settlements (BIS) had asked RBI for vital inputs to arrive at a country-specific risk weightage in the revised basle accord on capital adequacy for banks, slated to be in place by 2006.
"We have asked all the regulators, including Reserve Bank of India for the Quantitative Impact Study (QIS) to help in calibrating proposals," a top BIS official confirmed. The inputs were vital for the BIS in view of the need for increased capital adequacy in the Asian region due to wide use of real estate as collateral for business loans.
QIS would help in crunching the numbers and provide an opportunity for dialogue between regulators and banks in the respective countries, he said.
The country-specific risk weightage model would depend on inputs from the respective countries including India, as risk perceptions varied among countries and region, he added. The main objective of revised basle accord -- whose three basic pillars were minimum capital requirements, supervisory review process and market discipline -- was enhanced risk sensitivity for the banking system.
Bureau Report