How Indian banks fare on capital adequacy ratio against global peers

The Reserve Bank of India (RBI) feels easing capital norms for banks in haste could be harmful for the economy. A comparison of the capital adequacy ratios of banks in both developed and emerging markets can give a clue about the RBI’s reasoning. The capital adequacy ratio denotes how much capital a bank has against its loans. Under Basel III norms, the minimum required is 10.5 per cent.

Public sector banks in India control about 70 per cent of the market, thus their capital health is of more importance than private or foreign banks. Compared to India, most other countries,