ICICI Bank Tier-I capital well above Basel III requirements

Our Bureau Mumbai | Updated on November 24, 2017 Published on June 05, 2014

ICICI Bank is well capitalised to meet Basel III capital requirements with a Tier-1 capital adequacy ratio of 12.78 per cent as against the current requirement of 6.50 per cent, according to its latest annual report.

Tier-1 capital is one that is permanently and freely available to absorb losses without the bank being obliged to cease trading.

It consists mainly of share capital and disclosed reserves and is the highest quality capital because it is fully available to cover losses.

It is important because it safeguards both the survival of the bank and the stability of the financial system. The Basel III capital reforms framework seeks to strengthen the regulation, supervision and risk management of the banking sector.

Capital adequacy

ICICI Bank’s total capital adequacy ratio stood at 17.70 per cent as at March-end 2014 as against the current requirement of 9 per cent.

As at March 31, 2014, the consolidated Tier-1 capital adequacy ratio of India’s largest private sector bank was at 13.11 per cent as against the current requirement of 6.50 per cent and total consolidated capital adequacy ratio was at 18.34 per cent as against the required 9 per cent.

During fiscal 2012-13, the RBI had issued final Basel III guidelines, applicable with effect from April 1, 2013, in a phased manner till March 31, 2019.

The annual report said: “The bank continues to monitor further (regulatory) developments and believe that its current robust capital adequacy position and demonstrated track record of access to domestic and overseas markets for capital raising will enable us to adapt to the Basel III framework.”

ICICI Bank’s capital management framework includes a comprehensive internal capital adequacy assessment process conducted annually.

Published on June 05, 2014

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