The IUP Journal of Bank Management
The Impact of Basel III Norms on Indian Public Sector Banks: A Review of Empirical Studies

Article Details
Pub. Date : Aug, 2020
Product Name : The IUP Journal of Bank Management
Product Type : Article
Product Code : IJIT10820
Author Name :Krishan K Boora and Savita
Availability : YES
Subject/Domain : Finance
Download Format : PDF Format
No. of Pages : 18

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Abstract

A strong and stable banking sector is vital for the development of an economy. An extraordinary development has been noticed in the banking system of India in the last few years. The scenario of the Indian banking sector has changed due to liberalization, globalization, and various financial sector reforms. After several financial crises in the banking sector across the globe, the financial stability and soundness of the banking sector became a critical issue, and it created the need for uniform banking regulations all over the world. For this purpose, Bank for International Settlements (BIS) formed the Basel Committee on Banking Supervision. This committee framed the Basel Capital Accords of Basel I in 1988, Basel II in 2004 and Basel III in 2010. The objective of this paper is to review the available literature on the Basel III norms and their impact on Indian public sector banks. The empirical studies of the last seven years (2013-2020) have been reviewed in this paper. This paper reveals that the new capital regulation will benefit the banking sector in several ways like a strong and stable financial system and increase the shock-absorbing capacity of banks. Indian banks will have to face various difficulties in its implementation such as a decline in profitability, a higher level of NPAs, and heavy cost of borrowed funds.


Description

The banking sector is a major component of the economic and financial system of a country and its activities affect every sector of the economy. The competition in the banking sector forced traditional banking to turn into modern banking. Today, banks are more concerned about the quality and competition in the market because of the tremendous challenges in the banking sector. After several financial crises in the banking sector across the globe, the financial stability and soundness of the banking sector became a critical issue and it created the need for uniform banking regulations all over the world. A number of regulations have been prescribed


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