Business Daily from THE HINDU group of publications
Tuesday, Jan 29, 2008
ePaper | Mobile/PDA Version
Business Daily from THE HINDU group of publications Tuesday, Jan 29, 2008 ePaper | Mobile/PDA Version |
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Opinion
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Letters Implementation of Basel-II This is with reference to the interview on "Seven issues to keep banks on the Basel front" (Business line, January 24). Though the interviewee has pointed out seven issues which may tune banks to adopt Basel-II guidelines, there is need for its cautious implementation in India. The implementation of Basel-II requires a solid infrastructure. Pillar 1 requires data skills and systems that are lacking in several developing countries. The increased risksensitivity in Basel-II may lead to higher bank capital requirements. Consequently, banks lending to emerging and developing markets will sustain higher charges for credit and operational risk. The IMF has pointed out that premature adoption of Basel-II in countries with limited capacity would lead to diversion of resources. Also, the IMF admits that it has no internal expertise to monitor the implementation. Nevertheless, political intervention on bank management is beyond the control of supervisors; . implementation of Basel II is not going to be easy. N. R. Nagarajan e-mail Letters to the editor and contributions can be sent by e-mail to:mailto:bleditor@thehindu.co.in More Stories on : Letters | Standards & Benchmarks
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