RBI rejected govt proposal to apply Basel-III guidelines to four banks

RBI has not acceded to the government's demand of altering the risk weights assigned to the Micro, Small and Medium Enterprises (MSMEs) at the time of availing loans

The Reserve Bank of India (RBI) declined a request from the government to apply Basel-III guidelines, an international regulatory framework for banks, to just four lenders in the country, in the central board meeting on Monday.

The Board of Financial Supervision (BFS) of the RBI will now examine the government’s proposal to review the Prompt Corrective Action (PCA) framework by re-looking at two additional parameters — non-performing assets (NPAs) and profitability, in the form of return on assets.

“The RBI did not agree to the request of applying Basel-III norms to four lenders instead of all,” said a senior government