RBI postpones Basel-III rollout to April 1

Gives banks more time on tier-1 capital says it's noting implementation progress elsewhere

The Reserve Bank of India (RBI) has rescheduled the start date for implementation of to April 1, instead of January 1, it announced today.

Their circular came on a day when some public sector had withdrawn their perpetual bond issuances, as these would not qualify as in the Basel-III regime. As a result, banks will have more time on this.

said it would closely monitor the progress on Basel-III implementation in other countries, particularly in the major ones which are members of the Basel Committee on Banking Supervision (BCBS).

In May, it had issued guidelines on implementation of Basel-III capital regulation. These were to be implemented from January 1 and to be fully in place as on March 31, 2018.

The commencement date was kept as January 1, though the government’s financial year begins on April 1, given the global implementation schedule agreed to by the BCBS. Postponement gives banks more time on perpetual bonds. Tier-1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. Under Basel-III, equity capital and retained earnings are the predominant form of tier-1 capital and perpetual bonds do not qualify.

and were planning to raise Rs 200 crore and Rs 800 crore, respectively, in December by way of perpetual bonds. They’d withdrawn these issues for December but can now raise these till March 31.

BCBS, on December 14, observed that 11 members had published the final set of Basel-III regulations effective from the start date of January 1 — Australia, Canada, China, Hong Kong, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and Switzerland. Seven other jurisdictions, including the European Union and America, had issued draft regulations and indicated they were working towards issuing final versions as quickly as possible.

The Committee further observed, “The globally agreed timeline includes a number of milestones from 2013 to 2019, designed to provide for a gradual phasing in of the new capital requirements. It is expected that as remaining jurisdictions finalise their domestic regulations during 2013, they will incorporate all the remaining transitional deadlines in line with the original global agreement, even where they have not been able to meet the January 1 start date. Hence, by the end of 2013, almost all Basel Committee jurisdictions will be implementing Basel-III, in accordance with the agreed timetable. This is an absolutely critical step towards strengthening the resilience of the global banking system.”

image
Business Standard
177 22
Business Standard

RBI postpones Basel-III rollout to April 1

Gives banks more time on tier-1 capital says it's noting implementation progress elsewhere

BS Reporter  |  Mumbai 



The Reserve Bank of India (RBI) has rescheduled the start date for implementation of to April 1, instead of January 1, it announced today.

Their circular came on a day when some public sector had withdrawn their perpetual bond issuances, as these would not qualify as in the Basel-III regime. As a result, banks will have more time on this.

said it would closely monitor the progress on Basel-III implementation in other countries, particularly in the major ones which are members of the Basel Committee on Banking Supervision (BCBS).

In May, it had issued guidelines on implementation of Basel-III capital regulation. These were to be implemented from January 1 and to be fully in place as on March 31, 2018.

The commencement date was kept as January 1, though the government’s financial year begins on April 1, given the global implementation schedule agreed to by the BCBS. Postponement gives banks more time on perpetual bonds. Tier-1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. Under Basel-III, equity capital and retained earnings are the predominant form of tier-1 capital and perpetual bonds do not qualify.

and were planning to raise Rs 200 crore and Rs 800 crore, respectively, in December by way of perpetual bonds. They’d withdrawn these issues for December but can now raise these till March 31.

BCBS, on December 14, observed that 11 members had published the final set of Basel-III regulations effective from the start date of January 1 — Australia, Canada, China, Hong Kong, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and Switzerland. Seven other jurisdictions, including the European Union and America, had issued draft regulations and indicated they were working towards issuing final versions as quickly as possible.

The Committee further observed, “The globally agreed timeline includes a number of milestones from 2013 to 2019, designed to provide for a gradual phasing in of the new capital requirements. It is expected that as remaining jurisdictions finalise their domestic regulations during 2013, they will incorporate all the remaining transitional deadlines in line with the original global agreement, even where they have not been able to meet the January 1 start date. Hence, by the end of 2013, almost all Basel Committee jurisdictions will be implementing Basel-III, in accordance with the agreed timetable. This is an absolutely critical step towards strengthening the resilience of the global banking system.”

RECOMMENDED FOR YOU

RBI postpones Basel-III rollout to April 1

Gives banks more time on tier-1 capital says it's noting implementation progress elsewhere

The Reserve Bank of India (RBI) has rescheduled the start date for implementation of Basel-III financial norms to April 1, instead of January 1, it announced today.

The Reserve Bank of India (RBI) has rescheduled the start date for implementation of to April 1, instead of January 1, it announced today.

Their circular came on a day when some public sector had withdrawn their perpetual bond issuances, as these would not qualify as in the Basel-III regime. As a result, banks will have more time on this.

said it would closely monitor the progress on Basel-III implementation in other countries, particularly in the major ones which are members of the Basel Committee on Banking Supervision (BCBS).

In May, it had issued guidelines on implementation of Basel-III capital regulation. These were to be implemented from January 1 and to be fully in place as on March 31, 2018.

The commencement date was kept as January 1, though the government’s financial year begins on April 1, given the global implementation schedule agreed to by the BCBS. Postponement gives banks more time on perpetual bonds. Tier-1 capital is the core measure of a bank’s financial strength from a regulator’s point of view. Under Basel-III, equity capital and retained earnings are the predominant form of tier-1 capital and perpetual bonds do not qualify.

and were planning to raise Rs 200 crore and Rs 800 crore, respectively, in December by way of perpetual bonds. They’d withdrawn these issues for December but can now raise these till March 31.

BCBS, on December 14, observed that 11 members had published the final set of Basel-III regulations effective from the start date of January 1 — Australia, Canada, China, Hong Kong, India, Japan, Mexico, Saudi Arabia, Singapore, South Africa and Switzerland. Seven other jurisdictions, including the European Union and America, had issued draft regulations and indicated they were working towards issuing final versions as quickly as possible.

The Committee further observed, “The globally agreed timeline includes a number of milestones from 2013 to 2019, designed to provide for a gradual phasing in of the new capital requirements. It is expected that as remaining jurisdictions finalise their domestic regulations during 2013, they will incorporate all the remaining transitional deadlines in line with the original global agreement, even where they have not been able to meet the January 1 start date. Hence, by the end of 2013, almost all Basel Committee jurisdictions will be implementing Basel-III, in accordance with the agreed timetable. This is an absolutely critical step towards strengthening the resilience of the global banking system.”

image
Business Standard
177 22

More News

  • Janmejaya Sinha Janmejaya Sinha: An agenda for the new RBI governor
  • Arundhati Bhattacharya No retail loan bubble in the making, says SBI chief
Widgets Magazine
Widgets Magazine
Advertisement

Upgrade To Premium Services

Welcome User

Business Standard is happy to inform you of the launch of "Business Standard Premium Services"

As a premium subscriber you get an across device unfettered access to a range of services which include:

  • Access Exclusive content - articles, features & opinion pieces
  • Weekly Industry/Genre specific newsletters - Choose multiple industries/genres
  • Access to 17 plus years of content archives
  • Set Stock price alerts for your portfolio and watch list and get them delivered to your e-mail box
  • End of day news alerts on 5 companies (via email)
  • NEW: Get seamless access to WSJ.com at a great price. No additional sign-up required.
 

Premium Services

In Partnership with

 

Dear Guest,

 

Welcome to the premium services of Business Standard brought to you courtesy FIS.
Kindly visit the Manage my subscription page to discover the benefits of this programme.

Enjoy Reading!
Team Business Standard