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Thursday, May 3, 2012

Basel III to be implemented from January 1, 2013

The Reserve Bank of India (RBI), issued the final guidelines for implementation of Basel III capital regulation in India, which would be effective from January 1, 2013, in a phased manner.

The Basel III capital ratios will be fully implemented on March 31, 2018.

Banks have to maintain Tier I capital, or core capital, of at least 7 per cent of their risk weighted assets on an ongoing basis.

Under the existing capital adequacy guidelines based on the Basel II framework, banks are required to maintain Tier I capital of at least 6 per cent of their risk weighted assets.

The total capital ratio, including Tier I and Tier II, must be at least 9 per cent, unchanged from the current requirement, the RBI said in a statement, compared with the Basel III minimum requirement of 8 per cent.