A Study of Regulatory Framework of Indian Banking Sector in Context of Basel Guidelines

Abstract

The Basel guidelines aim to provide a standardised regulatory approach to measure newlinevarious kinds of risks exposures of internationally active banks, containing the newlinecontagion effect and making the global financial system more robust. A few measures newlineto attain this objective is by ensuring that the banks are adequately capitalised and there newlineare proper established processes for supervision and market discipline. In emerging newlineeconomies like India, these guidelines are particularly important as the regulatory newlineframeworks not only provide protection against systemic vulnerabilities but also make newlinethe systems more transparent for monitoring the performance and financial growth. newlineIn the current study, the purpose is to obtain an overall view on the role of regulations newlinein the Indian banking sector in accordance with the Basel guidelines. The thesis starts newlineby examining the existing research on the subject using Scopus database for a period newlineof three decades. A bibliometric analysis is conducted along with science mapping newlinetechniques and the findings indicate that more articles have originated from developed newlinecountries. The subject is studied in terms of relevant indicators for Indian banks. It was newlinefound that the studies conducted in this domain are limited and most research available newlineis focussed on public sector banks, thus prompting a need for further research. newlineBasel Accords were introduced in India based on the recommendations of the newlineNarasimhan Committee in the early 1990s, the time coincided with the implementation newlineof economic reforms in the economy. In this research, an overview of Indian banking newlineindustry is drawn to trace the trends in the post economic reforms era and document the newlineemerging patterns over the last three decades. It aids in comparing the intended newlinetransformation in the banking sector with the actual milestones achieved. newlineThe thesis further undertakes an empirical study to determine the interaction of capital newlineand risk under regulations.