- Basel III guidelines were released in 2010 in response to the 2008 financial crisis.
- They aim to promote a more resilient banking system.
- Key provisions focus on four vital banking parameters:
- Capital: Improve quantity and quality of capital.
- Leverage/Debt: Reduce excessive debt.
- Funding: Improve funding stability.
- Liquidity: Enhance banks’ ability to absorb shocks.
- Minimum capital requirement is 10.5% of risk-weighted assets (including 2.5% capital conservation buffer).
- India’s requirement is 11.5%.