Open AccessImpact of BASEL III on India
Author(s) -
Aastha Jain
Publication year - 2017
Publication title -
journal of business management and information systems
Language(s) - English
Resource type - Journals
ISSN - 2394-3130
DOI - 10.48001/jbmis.2017.0401003
Subject(s) - basel i , basel ii , basel iii , profitability index , operational risk , capital requirement , risk adjusted return on capital , risk weighted asset , financial system , economics , rest (music) , business , monetary economics , finance , risk management , financial capital , capital formation , market economy , human capital , incentive , medicine , cardiology
The Basel Committee on Banking Supervision (BCBS) set the first of capital accords in 1988, called the Basel I. Due to the dynamic changes in the world of financial system Basel I gave way to Basel II. Basel II plagued with the problem of pro-cyclicality paved the way for Basel III. India adopted Basel III norms in 2012. The present paper studies the impact of Basel III on India. In the short run, it will lead to a reduction in profitability of banks, curtailed credit to the economy and it is accused of being a needless burden on the Indian banks. But in the longer run, it will keep India integrated with the rest of the world. It will make the Indian financial system stronger, more stable and sound. It boils down to a trade-off between short-term costs and long run growth benefits.