'India would be impacted by newer regulations'

D Subbarao. PTI

“What concerns us is that these global standards are going to be applied uniformly but their implications for emerging market economies will be different, given the different stages of our financial sector development,” Subbarao said.

Speaking at a global seminar, organised by the Reserve Bank’s research and learning body CAFRAL and the Bureau of International Settlements, Subbarao said the financial sector in the country is still under development. Following the recession of 2008-09, a slew of norms have been either suggested or are in the process of being made to ensure financial stability like the Financial Stability Board and the Basel Committee on Banking Supervision (BCBS).

One of BCBS’ suggestions—the Basel-III norms calling for additional capital adequacy of banks—is one of the most debated issues at present.

Subbarao cited studies done by multiple bodies which talk of affecting growth following implementation of Basel-III and said the country will also get affected by it even though a majority of banks have healthy capital buffers.

RBI hikes rate ceilings

In a relief to importers and exporters hit hard by Euro zone crisis, RBI revised the interest rate ceiling by 150 basis points for raising overseas trade credit.

The all-in-cost ceiling both for importers and exporters has been raised from 200 basis points (bps) to 350 bps over London Inter Bank Offer Rate (LIBOR). The enhancement in ceiling is applicable upto March 31, 2012, it said.

The limit includes different kind of fees like management fee, handling/processing charges, out of pocket and legal expenses. Besides, the apex bank has directed the banks that they will not charge any other levy on raising export credit.  

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