Consider the following statements regarding BASEL Norms:
Which of the following statements is/are correct?

1 only

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2 only

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Both 1 and 2

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Neither 1 nor 2

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Solution

The correct option is A 1 only
Basel is the headquarters of Bureau of International Settlement (BIS), which fosters cooperation among central banks with a common goal of financial stability and common standards of banking regulations.

Basel guidelines refer to broad supervisory standards formulated by this group of central banks - called the Basel Committee on Banking Supervision (BCBS).

The set of agreement by the BCBS, which mainly focuses on risks to banks and the financial system are called Basel accord. The purpose of the accord is to ensure that financial institutions have enough capital on account to meet obligations and absorb unexpected losses.

India has accepted Basel accords for the banking system.

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Similar questions

Q40) Identify the correct statement/s about the Basel norms introduced by the Bank of international settlements (BIS)

i) The Basel committee on banking supervision looks after the implementation of Basel norms.

ii) Basel norms 1 was introduced in 1990

iii) Indian banks are following Basel norms 2 which were introduced in 2004

iv) Indian banks will adopt Basel norms 3 in 2019

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:

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