An overview of basel norms, its framework, its requirements and challanges for implementation in India,Steps taken by government.

1. BASEL ACCORD
A Journey_ From Potential of Loss
to acceptance of Risk
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Submitted by-
Prakhar Khandelwal
Rahul Boro
Hasan Ali
Payel Banerjee
Nisha Kumari
Submitted by-
Prakhar Khandelwal

2. ASHIFTINBANKINGDRIVE
INTRODUCTION TO BASEL NORMS
Set of international banking rules and regulations
BASEL ACCORD
BASEL
1

3. ASHIFTINBANKINGDRIVE
REGULATORY FRAMEWORK
• Established on 17 May 1930.
• HO: Basel, Switzerland.
• Founded by group of Central Banks of 10 member
countries.
• 60 member central banks
• Mission is to foster monetary and financially
stability.
• Representative offices in Hong Kong and Mexico
City.
• Promoted in 1974 by BIS in at Basel, Switzerland.
• provides a forum for regular cooperation on banking
supervisory matters.
• Objective is to improve the quality of banking
supervision worldwide.

4. ASHIFTINBANKINGDRIVE
OBJECTIVE
 Ensuring risk sensitive allocation of Capital;
 Separating Operational risk from Credit risk;
 Attempting to align economic and regulatory capital
more closely to reduce the scope for arbitrage;
 Ensuring sufficient capital to meet the obligations and
absorb unexpected losses.

5. Risks in
banking
Financial Risk
Credit Risk
Borrower Risk
Intrinsic or
Industry risk
Portfolio or
Concentration
Risk
Market Risk
Interest rate
Risk
Liquidity Risk
Currency Forex
Risk
Hedging Risk
Non-Financial
Risk
Operational Risk
Strategic Risk
Funding Risk
Political Risk
Legal Risk

6. ASHIFTINBANKINGDRIVE
Need for Basel 3 in India
 To connect India with rest of the world.
 To avoid deviation from global standards.
 Avail the advantage of standard regulatory regime.
 To safeguard banking sector from external system.
 To emerge as an ideal entity in global competition.

7. ASHIFTINBANKINGDRIVE
Challenges For Implementation In India
 Capital
 Liquidity
 Technology
 Skill development
 Governance
 Recent Political Actions

8. 2009 2010 2011 2012 2013
PSB 8.06 8.3 8.95 9.13 8.68
PVT 13.59 14.4 14.69 13.62 13.29
0
2
4
6
8
10
12
14
16
AverageCARTierI% Capital Adequacy Ratio Tier 1

9. 2009 2010 2011 2012 2013
PSB 5.14 4.98 4.43 3.88 3.45
PVT 2.44 2.69 2.17 2.41 2.28
0
1
2
3
4
5
6
AverageCARTierII% Capital Adequacy Ratio Tier 2

10. ASHIFTINBANKINGDRIVE
Steps Taken By Government
 Habilitate banks to access market.
 INDRADHANUSH scheme to revamp PSBs, seeks to
improve efficiency and functioning of banks.
 Announcement of Domestic Systemically Important
Banks(D-SIBs).