Consider the following statements regarding BASEL-I guidelines:
Which of the following statements is/are correct?

1 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!

2 only

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Both 1 and 2

Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses

Neither 1 nor 2

No worries! We‘ve got your back. Try BYJU‘S free classes today!

Open in App

Solution

The correct option is C Both 1 and 2
In 1988, BCBS introduced capital measurement system called Basel capital accord, also called as Basel 1. It focused almost entirely on credit risk. It defined capital and structure of risk weights for banks.

The minimum capital requirement was fixed at 8% of risk weighted assets (RWA). RWA means assets with different risk profiles. For example, an asset backed by collateral would carry lesser risks as compared to personal loans, which have no collateral.

India adopted Basel 1 guidelines in 1999.

Suggest Corrections

Similar questions

Q1. Consider the following statements about Capital Adequacy Ratio (CAR):

1. Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital in relation to its risk-weighted assets and current liabilities.

2. The risk-weighted assets take into account credit risk only.

Select the correct answer using the codes given:

1

2

3

Q2. Consider the following statements Basel III norms:

1. The Basel III norms stipulated a capital to risk-weighted assets of 8%.

2. Indian scheduled commercial banks are required to maintain a CAR of 9% while Indian public sector banks are emphasized to maintain a CAR of 12%.

Select the correct answer using the codes given:

Join BYJU'S Learning Program