Online published on 17 October, 2012.
Capital Adequacy Ratio, ever since its introduction in 1988, has become an important benchmark to assess the financial strength and soundness of banks. The Basel-III framework is aimed at increasing the resilience of the global banking system by enhancing the quality, quantity of bank capital, providing a check on leverage and introducing capital buffers above the minimum requirements to provide a cushion during adverse financial conditions. Basel III Implementation will be a daunting task not only for the banks but also for Govt. as Public Sector Banks are likely to seek a capital injection from the government. In the Indian context, majority of the banks have been able to comply with Basel-II norm of CAR, though Public Sector Banks lag behind. The paper attempts to study the position of Indian banks with respect to capital adequacy and analyze the transition from Basel II to Basel III norms.
Countercyclical Capital buffer, Capital Conservation buffer, Counterparty Credit Risk, Liquidity Coverage Ratio, Net Stable Funding Ratio, Global Leverage Ratio
