While foreign banks in India and Indian banks operating abroad are to meet Basel-II norms by March 31, 2008, all other scheduled commercial banks will have to adhere to these guidelines pertaining to risk provisioning by March 31, 2009, the Reserve Bank said on Tuesday. In its mid-term review of Annual Policy for FY07, RBI said that this relates to standardised approach for credit risk and the basic indicator approach for operation risk under Basel II.
More time has been given to other scheduled commercial banks "taking into account the state of preparedness of the banking system," the RBI said.
This will provide banks some more time to put in place appropriate systems so as to ensure full compliance of Basel II. However, the apex bank had earlier intended the date to be March 31, 2007.
Basel-II norms stipulate banks to assess risks -- credit, market and operations risks -- and make higher provisioning for covering these risks.
Monetary and Credit Policy 2006-07: Complete Coverage
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