Indian Banks and Basel II

Abstract

Basel II initially published in June 2004, was intended to create an international standard for banking regulators to control how much capital banks need to put aside to guard against the types of financial and operational risks banks face. Basel II attempted to accomplish this by setting up risk and capital management requirement designed to ensure that a bank has adequate capital for the risk the bank exposes itself to, through its lending and investment practices. This paper helps in detailed study about the Basel II and also helps to find out the relationship between capital adequacy, non performing assets and net profits of some selected private and public sector banks. This paper also explores the effect on Net profit due to change in Capital Adequacy ratio and non Performing Assets.