India to extend deadline to meet Capital Rules under Basel II: RBI

Mumbai, Sept 26 (UNI) The Reserve Bank of India (RBI) is set to give domestic banks more time to beef up its capital before imposing new global rules on financial health, RBI Deputy Governor V Leeladhar said here today.

The banking regulator in the country may extend the deadline from March 2007 when it finalizes Basel II standards in a few weeks, the RBI Deputy Governor said at the 3-day banking summit organised by the FICCI-IBA combine here today. However, Mr Leeladhar did not specify any reason for doing it.

Under the new Basel II rules, banks must adjust capital requirements, according to the risks in portfolios of loans and investments.

The RBI Deputy Governor focussed to a large extent on the challenges that the banking regulator, as a system, face in the implementation of Basel II. He balanced that with a thought that Basel II does not pose just challenges but also offers considerable opportunities to banks to upgrade their risk management systems and ''thus become more efficient and competitive''.

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