India's Capital Adequacy Regime

India's Capital Adequacy Regime

This note presents an analytical review of the Basel I capital adequacy regime and the current level of the capital to risk-weighted asset ratio (CRAR) of India's banking sector. Under Basel I, the banking system is performing reasonably well, with an average CRAR of about 12 percent, that is h...

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Bibliographic Details
Published in:Economic and political weekly Vol. 42; no. 43; pp. 66 - 71
Main Authors: Sarma, Mandira, Nikaido, Yuko
Format: Journal Article
Language:English
Published: Sameeksha Trust 27-10-2007
Subjects:
Bank capital
Bank credit
Banking industry
Banking regulation
Basel Accord
Capital requirements
Commercial banks
Credit ratings
Private banks
Public banks
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Summary:This note presents an analytical review of the Basel I capital adequacy regime and the current level of the capital to risk-weighted asset ratio (CRAR) of India's banking sector. Under Basel I, the banking system is performing reasonably well, with an average CRAR of about 12 percent, that is higher than the internationally accepted 8 percent. A discussion from the Indian perspective of several issues relating to the Basel II norms that are to be introduced in March 2008.
ISSN:0012-9976
2349-8846