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

Related News

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Their circular came on a day when some public sector banks had withdrawn their perpetual bond issuances, as these would not qualify as in the Basel-III regime.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 They’d withdrawn these issues for December but can now raise these till March 31.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.”

Read more on:   
|
|
|
|
|

Read More

RBI to infuse Rs 8,000 cr through OMO on Jan 4

"Consistent with the stance of monetary policy and based on the current assessment of prevailing and evolving liquidity conditions, the Reserve Bank ...

Quick Links

More news from Finance Rss icon

Kotak-ING Vysya merger is positive, says ICRA

The credit rating agency says the deal will improve operating profile of Kotak, create cross-selling opportunities

Central bank to hold back for now

The central bank might not be in any immediate position to deliver a rate cut, even as the first target of sub-eight per cent inflation for ...

PSBs continue to stuggle for share of low-cost deposits

PSBs' share of current and saving accounts has dipped from 33.5% in March '13 to 32.1% in Sept '14

Back to Top