'75 pc banks do not have Basel II funds'

Published on Nov 22, 2006 06:03 PM IST

Seventy five per cent of Indian banks are yet to set up Basel II guidelines, but confident of meeting the RBI guidelines.

HT Image
HT Image
None | ByPress Trust of India, New Delhi

Majority of banks in the country are yet to set up specific budgets for Basel II guidelines, although the industry is confident of meeting the RBI guidelines in this regard, a new study reveals.

According to a new study by the global consultancy firm KPMG released on Wednesday. Indian banks are confident in their ability to implement the Basel II norms and meet the RBI guidelines for achieving a standard approach for credit risk and the basic approach in respect of the operational risk.

However, approximately 75 per cent of the banks surveyed have not specifically budgeted funds for their Basel II programme, KPMG said.

Basel II is a round of deliberation by central bankers from across the globe, under the auspices of the Basel Committee on Banking Supervision (BCBS). It is aimed at producing uniformity in the way banks and banking regulators approach risk management across national borders.

Given the impending timelines for implementation of the Basel II norms, banks lagging behind need to devote considerable resources in this area so that they can address the necessary requirements of the RBI, it said in a report titled "India: Ready for Basel II?".

About 89 per cent of the banks surveyed indicated that they have a 'dedicated team' responsible for Basel II implementation. However, very few banks have established the position of Chief Risk Officer with a reporting line to the CEO/Board and whose role has been defined with clarity.

Although the regulator is yet to issue more specific guidelines, only 16 per cent of the banks surveyed have commenced the process of planning for the more advanced approaches of Basel II.

Get Latest India Newsalong with Latest Newsand Top Headlinesfrom India and around the world.
SHARE THIS ARTICLE ON
SHARE
Story Saved
OPEN APP
×
Saved Articles
Following
My Reads
My Offers
Sign out
New Delhi 0C
Saturday, January 28, 2023
Start 15 Days Free Trial Subscribe Now
Register Free and get Exciting Deals