Capital Adequacy Regime in India: An Overview

Mandira Sarma () and Yuko Nikaido ()
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Mandira Sarma: Indian Council for Research on International Economic Relations
Yuko Nikaido: Indian Council for Research on International Economic Relations

Indian Council for Research on International Economic Relations, New Delhi Working Papers from Indian Council for Research on International Economic Relations, New Delhi, India

Abstract: In this paper we present an analytical review of the capital adequacy regime and the present state of capital to risk-weighted asset ratio (CRAR) of the banking sector in India. In the current regime of Basel I, Indian banking system is performing reasonably well, with an average CRAR of about 12 per cent, which is higher than the internationally accepted level of 8 per cent as well as India's own minimum regulatory requirement of 9 per cent. As the revised capital adequacy norms, Basel II, are being implemented from March 2008, several issues emerge. We examine these issues from the Indian perspective.

Keywords: Capital Adequacy Ratio; Basel I; Basel II; Reserve Bank of India; SMEs lending (search for similar items in EconPapers)
JEL-codes: G20 G21 G28 (search for similar items in EconPapers)
Pages: 28 Pages
Date: 2007-07
New Economics Papers: this item is included in nep-ban, nep-cwa, nep-dev and nep-rmg
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Citations: View citations in EconPapers (2)

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