Estimating the Basel III Capital Requirement for Indian Banks
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Estimating the Basel III Capital Requirement for Indian Banks
Applied Economics Quarterly, Vol. 64 (2018), Iss. 3 : pp. 253–277
1 Citations (CrossRef)
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Swamy, Vighneswara, Professor, IBS-Hyderabad, ICFAI Foundation for Higher Education – A deemed university, Dontanapally, Shankarapally Road, Hyderabad – 504201, Telangana, India.
Cited By
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A comparative study of implementation Basel III between commercial and Islamic banks: a bibliometric analysis and systematic literature review
Al-Hanandeh, Abdallah
Othman, Aniza
Mastor, Nor Hamimah
(2024)
https://doi.org/10.1108/JIABR-06-2024-0234 [Citations: 0]
Abstract
Abstract
The study estimates the Basel-III capital requirement for Indian banks employing the methodology incorporating the reported tier-1, tier-2 capital, total capital and risk-weighted assets (RWAs) sourced from the Basel disclosures made by the banks on their websites. In order to understand the strategy and the response of different bank groups based on their ownership styles, this study, groups the banks into scheduled commercial banks, public sector banks group, and private banks and considers the data for the period 2002 – 2011. The results suggest that with an assumed growth of RWAs at 10%, banks in India would require additional minimum tier-1 capital of INR 2.51 trillion. With an assumed RWAs growth at 12% and 15%, the requirement would be in the order of INR 3.36 trillion and INR 4.74 trillion respectively.
JEL classifications: E44, E61, G2, G21, G28
Keywords: Basel III, capital and liquidity, commercial banks, capital, countercyclical capital buffers, financial (in)stability
Table of Contents
| Section Title | Page | Action | Price |
|---|---|---|---|
| Vighneswara Swamy: Estimating the Basel III Capital Requirement for Indian Banks | 253 | ||
| Abstract | 253 | ||
| 1. Introduction | 253 | ||
| 2. Related Literature | 255 | ||
| 3. Prudential Regulation in Indian Banking | 258 | ||
| 3.1 Basel III Capital Requirements | 260 | ||
| 4. Data and Methodology | 253 | ||
| 5. Results and Discussion | 253 | ||
| 6. Conclusion | 253 | ||
| References | 253 | ||
| Annex 1: Elements of Tier 1 and Tier 2 Capital | 254 | ||
| Annex 2: Modeling the Estimation of Additional Capital Requirement | 254 |