New Delhi: The banks in India will be able to deal better with the global uncertainties and economic recession.  Banks will be operating with more transparency and it will be made mandatory to disclose all types of financial transactions to the public.

The process to consolidate risk withholding capacity will continue in next 8 years. For that, the Reserve Bank of India (RBI) has implemented the guidelines on the implementation of BASEL III standards on Wednesday.

BASEL III standard is already implemented in almost all countries in the world. It is considered that this will facilitate in keeping vigil on financial institutions and global uncertainties and economic recession could be anticipated well within time. It will be implemented January 2013 and process will be completed by March 31, 2018.

It is also conjectured that to counter the risks, Indian banks will have to raise Rs 6 lakh crore in next few years. The government needs to play a big role in helping PSU banks to procure such a big amount.

As well with the directions to make all kinds of financial transactions public, it will not be possible for banks to hide any investments.

It is noted that the lack of transparency among American and European banks is cited as the biggest reason behind the global recession of 2008-09. However, after the directives from the RBI, banks will have to create risk funds every year which will be used in troubled times.  The RBI has also said that the banks failing to implement the directives will be closed or merged with another bank.

(JPN/Bureau)

 

Latest news from Business News Desk