Basel Ii

CMYK

CMYK

Wo r k i n g P a p e r

The Indian Journey to Basel II: Implementing Risk Management in Banks

Dr. SS Satchidananda Sanjeev Shukla

CBIT Centre of Banking and Information Technology Indian Institute of Information Technology 26/C, Electronic City, Bangalore

And

Oracle India Pvt. Ltd., DLF Corporate Park Block I DLF City Phase III Gurgaon 122002

CMYK

CMYK

CMYK

CMYK

CBIT Centre of Banking and Information Technology Indian Institute of Information Technology 26/C, Electronic City, Bangalore

And

Oracle India Pvt. Ltd., DLF Corporate Park Block I DLF City Phase III Gurgaon 122002

CMYK

CMYK

CMYK

CMYK

The Indian Journey to Basel II Implementing Risk Management in Banks

ABSTRACT

In this paper, we provide a perspective on the international regulatory framework for capital standards and its focus on implementation of risk management systems in banks with particular reference to the Indian scenario. We also discuss the Indian regulatory approach to this important challenge and the major issues involved in the Basel II implementation in the Indian context. We conclude with guidance for developing an implementation plan for ushering in effective and efficient risk management in banks.

{SS Satchidananda1 Sanjeev Shukla2 }

“Banking in modern economies is all about risk management. The successful negotiation and implementation of Basel II Accord is likely to lead to an even sharper focus on the risk measurement and risk management at the institutional level. Thankfully, the Basel Committee has, through its various publications, provided useful guidelines on managing the various facets of risk. The institution of sound risk management practices would be an important pillar for staying ahead of competition. Banks can, on their part, formulate ‘early warning indicators’ suited to their own requirements, business profile and risk appetite in order to better monitor and manage risks.”

Dr. Y.V.Reddy, Governor,...