|BASEL COMMITTEE|BASEL COMMITTEE ON BANKING SUPERVISION |WHAT IS BASEL COMMITTEE and Recommendations of BASAL COMMITTEE|
WHAT IS BASEL COMMITTEE ON BANKING SUPERVISION
- Basel Committee on Banking Supervision is an institution of Govemors of the Central Banks of G-10 nations and was formed in 1974.
- It has 27 members viz. Argentina, Australia, Belgium, Brazil, Canada, China, France, Germany, Hong Kong SAR, India, Indonesia, Italy, Japan, Korea, Luxembourg, Mexicot_ the Netherlands, Russia, Saudi Arabia, Singapore, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.
- Out of them 12 are permanent members and its headquarters are located at Basel Switzerland …
- This Basel Committee on Banking Supervision works on strengthening the soundness and stability of the banking system, internationally.
- In July 1988, it had released the guidelines on Capilal Measures and Capital standards, which were called Basel-1. These guidelines were accepted by RBI also and were implemented w.eJ 1992.
- In June 2006, it again issued the revised guidelines which are called Baselll. In line with the Baselll, RBI had issued the detailed guidelines from 2007.
- At Present Basel III is under development.
BANKS HAVE TO FOLLOW THE FOLLOW THE FOLLOWING MINIMUM REQUIREMENTS OF CAPITAL Fund:
- Minimum Total CRAR (Basel II Recommendations) : 8%
- Minimum Total CRAR (RBI Guidelines) : 9%
- For New Private Sector Banks: 10%
- The banks that um:fertake insurance busi-· ness: 10%
- Local Area Banks 15%
- For dividend declaration by banks 9%