IASbaba's Daily Current Affairs Analysis, IASbaba's Daily Current Affairs September 2015, UPSC
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IASbaba’s Daily Current Affairs – 22nd Sep, 2015 –?????
BASEL III norms and INDIA
Terms | Explanation |
Bank’s capital:
Bank’s own money (apart from Liability + Asset)
Tier 1 capital:
Most Liquid Capital with bank
Can be sold easily to ward off Crisis
Eg: Common Shares + Preferential Shares
Tier 2 capital:
Not as liquid as Tier-I
Eg: Debts (bonds) + Hybrid instruments (Having both characteristics of Debt and Equity)
Tier 3 capital:
Least Liquidity
Capital adequacy requirements (CAR)
Ratio of a Bank’s Capital to its Risk (absorb a reasonable amount of loss)
Higher CAR à More stability
Therefore,
Basel Capital adequacy requirement (CAR)
= 9% of RWA (Risk weighted assets)
OR
BASEL CAR:
[7% of RWA in T1] + [2% of RWA in T2]
Risk Weighted Assets (RWA)
Home Loan | 20% Riskà | Loaned: 30 Crores |
Vehicle Loan | 30% Riskà | Loaned: 20 Crores |
Commercial Loan | 50% Riskà | Loaned: 50 Crores |
Risk Weighted Assets | 100% | 100 Crores |
Have 9 Crore as TOTAL CAPITAL ADEQUACY if you want to loan out 100 crore
Basel I
?????? :
- Rigidity of “one-size fits” approach
- ????? ?? ??????? ?? ???? ???? ??? ????? ??????????? ?? ????
Basel II:
?????? ?? ????? ????? ????????????? ?? ?????? 8% ?? ??????? ????? ?? ???????? ?? |
Computation of RWA based on ‘three’ Risks:
- ???????,
- ???????, ??
- ??????? ?????
??? ?????:
- ??????? ????? ????????,
- ?????????? ??????? ?????????, ??
- ????? ???????
??????:
??????? ???? ?? ????? ???? ??????? ?? ??????? ???? ??? ??????(2007–08)
- Pro-Cyclical: ????? ??? ???,?? ?????? ?? ???????? ????? ?? ???????? ?? ???? ???? ???? ?? , ????? ???? ?? ????? ?? ????? ?? ????????? ???? ?? , ?? ?????? ????? ?? ??? ? ?? ?????? ?? ???? ???? ????? ????? ??? ?? ??????? ??????? ?? ??? ???????? ?? ???? ?? ??? ??? ????????? ????? ??? ?
- ????? ???? ?? ??? ????? ?? ????: ????? ?????? ????? ?? ???????? ???? ?? ??????? ??? ????? ?? ??????? ?? ?? ????? ?? ????? ???? ?? ?? ???? ?? ????
- ????? ??????? ?? ?????? ?? ??? ??? ????? ????? ?? ????? ???? ???? ??? , ??? ???? ???? ?????? ????? ??? |
- ????????? ??????? ????????? ?? ???? ?????,??? ???????? ??? ??????? ?? ??????? ???? ???? ????? ?? ?????? ?? ???? ?? ?????? ??????? ??? ??????? ??????? ??????? ??? ?????? ?
Basel III: A Global Regulatory Framework for more Resilient Banks and Banking systems
????????:
- ?? ?? ???? ????? ??????? ??????? ?? ?????? ???? ?? ?????? ?? ??? ??????? ????? ?? ????? ?????? ?? ????? ???? ?? ???|
- ??????? ?? ?????? ???? ?? ??????? ???? ???? ???? ?? ??????? ???? ?? ??? ??????? ??????? ?? ?????? ??? ????? ?????
?????????:
- ???? ??? ?????? ?? ????? ?? ????????
- ????? ?????? ?? ??????
- ??????????? ?? ???????? ??? ??????
- ??? ????? ?? ?????? ?? ?????
????:
- ????? ????? ????????????? ?? ???? ?? ??????? ???????? ????? ?? ????????
- ????? (???????, ????? ?? ???????????? ?????) ?? ???? ????|
- ?????????? ??????? ?????????
- ?????? ????? ?? ????? ?? ?????? ?? ??? ?????
- ????? ???????
- ?????? ?? ??????????
India:
- ???? ??? ??????? ????? ?? ???????? ????? ????? ????????????? ?? 9% ???? ??
- ??? ????????? ?????? – ????????? ??????? ??????
- ????????? ?????? ???? ??????? ??????? ?? ??????? ?? ???? 87%
- ????????? ??????? ?? ????: ????? ??? 73% ??????? ????????????? ?? ?????????? ?? ???? ?????? ?? 82%
- ?????? ?????? ??????? ??????? ??????? ?? 6%
Issues with Indian Banks:
- ?????????
- ????? ????????
- ????? ?? ????? ??
- ???? ?? ??????:
‘?????? ????? ???? ?? (?????) ?? ???????? ???? ?? ??? +???? ???? ??????? ?? ???? ?? ?? ???? ????? ?? ??? ‘
- ???? ?????:
‘????? ????? ?? ??? ????? ?????? ?? ????? ?? ?? ????????????? ?? ??????? ????? ????? ????? ?? ???? ?? ?? ??????? ?????’
- ???????? ?? ??????? ?? ????
??????? ?? ?????? ?? ????:
‘???????? ??? ?????? ?? ????? ???? ??????’
- ??????? ??????? ??? ???????:
‘?????? ?? ????????? ???? ?? ??? ????? ?? ?? ?????? ???????? ???? ???? ?? ??????? ????? ?? ?????????? ??? ???? III ?????? ????? ?? ??? ??? ???? ?? , ????? ???? ?????? ??? ????? ???? ?? ,?? ????? ?? ??? ???? ?? ??? ????? ?? ?????? ?? ????? ??? ‘
RoE:???? ?????????? ?? ????? ?? ????? ?????? ??????? ??? ?? ?????? ???? ??????? ?????? ?? ???? ?? ?????? ?? ??????? |
Current Scenario:
- Budget 2014:?????? ?? ??? ??????? ????? ?? ???? ?? ??? ?????? ?? ????? ???? ?????? ???? ????? ????? ????? ???????? ???? ?? ??? ???? ??????
- ???? ????? ?????? ????? ?????????? ?? ???? ???? ?? ??? ???? III ??????? ?????? ????? ?? ??? “??????” ??? ??? ?? |
- ???? ?? ????? ?? ????? ??? ???????? ??????? ?????????? ?? ???? ???? ?? ??? ???? ?? ???????? ?????????? ??? ?? ?????? ?????? “?? ???? ??”; ????? ?????? ???? ?? ???? ????? ?? ????? ???? ??? ?????? ?? ?? ?????? ?? ????????? ??|
- ??? ?? ????? ????? ?????? ?? ??? ?????? (??????) ?? ??????? ??? ??? ???? ????? ?? ???? ?? ?? ?????? ?????? ?????? ??????? ??? ??????? ???? ????????? ????????? ?? ???? ???? ?? ??? ???
Criticisms:
- ???? ??? ??????? ???? ?? ????? ?? ??? ?? ???????? “?????” ????? ?? ??? ??? ?????? ???? ?? ??? ?????? + ?????? + ?????? ?????????? ???? ????? ????? ?? |
- ?? ???? ??? ?? ?????? ?? ????????? ???? ???? ???? ???? ?????? ?? ?? ???????? ??? ?? ???????????? ??? ?? ?? ?????? ?? ?????????? ???? ??, ???? ?????? ??? ?? ?? ????? ?? ??? ?????? ????? ?? ???? ??, ?????? ???? ????? ?? |
Connecting the Dots:
- ???? ????? ????? ?? ???? ??????? ?? ??????? ?? ??????? ?? ???? ??? ????? ??? ??? ??? ???? ?????? |
- ???? ???? ?? ??????? ???? ?? ????? ?? ??? ????? ??? ????? ??? ?? ??????? ?????? ?? ???? III ?????? ?? ?????? ????? ???? ?? ??????? ?? ???????? ?????? ?
D-SIB: Domestic Systemically Important Banks: Too Big to Fail?
?????? ?? ??????
?????????? ????????? ???????????? ???? (G SIB)
- ?????? ?? ??? ???? ???? ?? ??????????
- ???? ????? ?????? ??????? ?????????? ??
????? ??????????? ?????????? ?????? (D SIB)
??? ?? ???????? ???? ??????? + ???? ???? ???? ?? ??? ???????? ?? ????? ???? ?? |
- ???? ?? ?????? ????: ?? ????? ??????
- ICICI and SBI:
??????? ???????: ??? ?? ??? ????? ?????? ?? ??????? ???
????? ????? ?????????? ?????? (?????)
?????? ?? ?????: ??????????? ?? ???????? ?? ??????? ?????
- ?????? ?? ???? + ??????? ??? ????? ?????
- ?? ?? ????? ?? ??? ????? ?2 ??????? ?? 0.8 ??????? ???????? ????? ?????? ?? ???? ??
- ???????? ???? ?? ?????? :
- ????: ?? + ??? ???, ???
- ????? : ??????? ??????? ????????? ?? ???
- ???????????: ???? ???? ?? ???? ??
- ??????: ???? ?????? ? ?? ???? ??? + ???? ??????? / ??????? ?? ?? ???? ?? ???
- ????? ?? ????? + ???? ???? ?? + ????? ?? ? ?????? ?? ?????? ??? ??? ????? ????? (?? ?????? ?? ???? ?? ??? ??? ????? ???? ?? ?? ??????)
- ???? ??? ?????? ???? (?????? ????????? ???????????? ????)
- ???? ??? ???? ???????? ???? ????? ?? ?????? ??? ???? ??? ????? ????????????? (?? ?????? ?? ??? ??? ?? ?? ???? ?? ??? ???) ???? ??? ???????? CET1 ????? ?????? ???? ???? ?? ????? ?? |
Benefits
- ???? ?????????? + ?????? ?? ???? ?????
- ??????? ???????: ???? ????? + ??? ????
- ???????? ?????: ?? ???? ?????? ?? ??? ??? ????? ?????
- ?????? ?? ????: ???????? ?? ??? ?????? ?????? ???? ??? ???? ?????
Limitations
- ???????? ?? ??? ???? ???????? ??? |
??????
- ??? ??????? ??????? ?????: ????? ?????? ?? ‘????’ ???
- ??? ???? ?? ??? ?????? ???? ??
- ????? ?????? ?? ???? ????
- ?????? ?????? ???? ?? ????-?????????
- ??????????? ???? ????????? ?????? ?????????? ???????
- ???? ???????? + ?????????? ?? ??? ?? ??? ???????? ??????? ?? ???????
- ?????? ?? ?? ?????? ?? ??????
- ???????? ????? ?? ???? ??? ??? ????? ?? ?? ?? ; ?? ?????? ?? ?? ????? ????? ??? ? ?? ?????? ?? ??? ???? ??
- ??? ?????? ?? ?????????? ???? ?? ??? ?????: ???? ????;?? ?? ?? ???? ???? ?? ????? ?? ????? ?? ??????? ?? ????????? ?? ?? ? ???? ???? ??? !
Connecting the Dots:
- ?? ???? ?????? ?? ???? ???? ????? ?????????? ??????? ?????? ????? (??????????) ?? ??? ??????????? ???? ????????? ?? ??????? ?? ????? ?? ??? ???? ????? ??? ????
- ????? ?????? ?? ?????????? ?? ?????? ?? ???? ?????? ? ??? ?? ??? ?? ?????? ???????