Impact of Basel Regulations on the Financial Performance of Indian Public Sector Banks: A Comparative Analysis Across Basel Regimes

This study explores the impact of the Basel regulatory frameworks on the performance of Public Sector Banks (PSBs) in India, highlighting significant changes in profitability, productivity, and asset quality. The analysis reveals that while Basel I and II facilitated improvements in key financial metrics, the transition to Basel III has resulted in marked declines in Return on Assets (ROA) and Return on Equity (ROE), alongside rising Non-Performing Assets to Net Advances (NPANA). Although operational efficiency has increased, as indicated by Business per Employee (BPE) and Operating Profit to Total Assets (OPRTA), these gains have not translated into sustained profitability. The findings emphasise the need for a balanced regulatory approach that supports both financial stability and the operational capabilities of PSBs. This research contributes to understanding the complex interplay between regulation and banking performance, providing insights for policymakers and future research.