Banking Awareness
IBPS-PO 2018
BASEL
BASEL: A committee on banking supervision, authorities that was established by Central Bank Governors of 10 countries in 1974.
1. USA
2. UK
3. ITALY
4. JAPAN
5. CANADA
6. SWITZERLAND
7. SWEDEN
8. BELGIUM
9. GERMANY
10. FRANCE
BASEL (A City of Switzerland)
HQ of BIS (Bank for International Settlement – BASEL)
Ø World’s Oldest International Financial Organization
Ø Established: 17 May 1930
Ø VC – Raghu Ram Rajan
Ø Representative Office- Hong Kong /Mexico
BCBS: (BASEL COMMITTEE FOR BANKING SUPERVISION)
Provide a forum for Regular Co-operation on Banking Supervisory Matter (Review)
RISK
1. CREDIT RISK
2. OPERATIONAL RISK
3. MARKET RISK
BASEL –to reduce the risk of Loans provided by banks
BASEL
BASEL 1
Introduced and apply on: 1988
In India: 1992
MCR (Marginal Capital Requirement)
CAR -4%-8%
CAPITAL ADEQUACY RATIO
BASEL 2
Introduced and apply on: 2003
Apply: 2006
In India: 2009
CAR -8%
In India 9 %
Tier 1 -7%
Tier 2 -2%
Pillars- P1, P2, P3
P1: MCR
BASEL 3
Introduced 2010
Apply 2013
In India: 31 March 2019
CAR- 10.5%
In India: 11.5%
CCB (Capital Conservation Buffer) - 2.5%
Pillars:
P1: MCR
P2: SRP (Supervisory Review Process)
RBI will supervise CAR for Banks.
P3: Market Discipline
(Government and Public will ask bank to discipline)
CRWA: Capital to Risk Weighted Asset Ratio
Total Capacity: Tier1+ Tier2
Tier1: owned permanent- Capital of Banks
Tier1: 7%
5.5% (Core Capital)
1.5% (Additional)
Tier 2: Borrowing + Liabilities
BASEL 3:
2008 Lehman’s Brother Bank US
CCB (Capital Conservative Buffer)
CAR –is a ratio of Bank’s Capital and Risk
A Bank can absorb a reasonable amount of loss and complies with statutory capital requirements.
DSIB (Dynamically Systematically Important Bank)
Bucket Bank
1% -
0.8% -
0.6% SBI
0.4% -
0.2 % ICICI
If these banks maintain their respective buckets CCB then they will be DSIB.
HDFC is also a DSIB now.
No comments:
Post a Comment