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- According to the findings of the Basel Committee on Banking Supervision (BCBS),Reserve Bank of India’s(RBI) norms on large exposures(LEX) for banks are compliant with the Basel requirements.
- The assessment was conducted by the Regulatory Consistency Assessment Programme(RCAP).
- The assessment focused on the completeness and consistency of the domestic regulations enforced by RBI on commercial banks in India.
- The report has said that while Basel large exposures framework limits the sum of all exposures of a bank to a single counterparty to 25% of Tier 1 capital,Indian regulations establish the large exposure limit at 20%.
- Further,Indian banks exposures to global systemically important banks are subject to stricter limits which is in line with the letter and spirit of the Basel Guidelines.
- Basel Committee on Banking Supervision(BCBS) is the primary global standard setter for the prudential regulation of banks.It has 45 members comprising central banks and bank supervisors from 28 jurisdictions.
- Basel III is an internationally agreed set of measures developed by the BCBS in response to the financial crisis of 2007-09.The measures aim to strengthen the regulation, supervision and risk management of banks.
- RCAP was established by the Basel Committee in 2011.RCAP assessments aim to ensure that each member jurisdiction adopts the Basel Framework in a manner consistent with the Framework’s letter and spirit.
