Wednesday, December 11, 2013

Making Rules Pay Off

....Not only would banks need to increase their chest of capital in the normal course of business, but the composition of this capital would also need to be re-jigged in order to create buffers to deal with particular economic conditions. Broad-level estimates published by the Reserve Bank of India in its annual report for the financial year 2011-2012 suggest that in order to achieve full Basel III implementation by 31 March 2018 (assuming a 20 per cent per annum uniform growth in risk-weighted assets or RWA of banks), the banking sector will require approximately Rs 1.6-1.75 lakh crore of common equity in addition to Rs 3.15-3.35 lakh crore in the form of non-equity capital...........

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