Sat. Dec 14th, 2019

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BASEL III COMPLIANCE OF the PSBs & RRBs

1 min read

The capital to risk-weighted assets ratio (CRAR) of the scheduled commercial banks of India was 13.02 percent by March 2014 (Basel-III)
falling to 12.75 percent by September 2014.

The regulatory requirement for CRAR is 9 percent for the decline in capital positions at the aggregate level, however, was on account of deterioration in capital positions of PSBs.

While the CRAR of the scheduled commercial banks (SCB) at 12.75 percent as of September 2014 was satisfactory, going
forward the banking sector, particularly PSBs will require substantial capital to meet regulatory requirements with respect to additional capital
buffers. In order to make the PSBs and RRBs compliant to the Basel III norms, the government has been following a recapitalisation programme for them since 2011-12. A High Level Committee on the issue was also set up by the government which has suggested the idea of ‘non-operating holding
company’ (HoldCo) under a special Act of Parliament (action is yet to come regarding this). Meanwhile, the government has infused three tranches of capital into the banks (infused funds go to the RRBs, too through the PSBs under whom they fall) upto March 2015:

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