'Basel panel may list some domestic banks as D-SIBs'

'Basel panel may list some domestic banks as D-SIBs'

 RBI Governor D Subbarao, on Tuesday, said they are awaiting final report of the Basel Committee on global systematically important banks (GSIBs) and expressed hope that the report may list some large domestic banks as domestically systematically important banks (D-SIBs).

“Currently, no Indian bank appears in the list of G–SIBs. However, the Basel Committee is working on the minimum principles for D-SIBs... We are waiting for the finalisation of these norms and when these norms come up, some domestic institutions might be designated as D-SIBs,” Subbarao told a 2-day banking summit organised by FICCI and IBA here.

Subbarao said there is a need to have sound mechanisms for DSIBs and he hopes that the Basel Committee on GSIBs will prescribe higher solvency standards DSIBs. The Financial Stability Board (FSB) had last October published its consultative document on a common template for GSIBs, which seeks to include a set of options and proposals to improve the data on linkages between GSIBs and on their exposures and funding dependencies.

Further, the RBI Governor said domestic banks will require an additional Rs 1.75 lakh crore of equity capital over the next five-and-a-half years to conform to Base III norms as per the RBI estimates.  The amount could vary depending on the extent to which the central government will infuse equity capital state-owned banks.

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