Sustainability and Bank Capital, A Study of Indian Private Banks

Banks’ lending business being risk based must be supported by adequate quantum of capital to ensure sustainability, soundness and resilience the bank. The Basel Committee on Banking Supervision announced in 1988, a set norms for banks observe order reinforce their financial stability when struck potential losses from deterioration asset quality. This was known as I. For purpose adequacy, has been sub divided into Common Equity Tier 1, Additional Tier1 2 capital. Capital Adequacy, this basis, also classified component study reveals that all new private sector are deeply conscious sustainability stand point operations profile assets. As good strategy, they have gradually building funds consonance with growth. A sensitivity analysis shows even 10% escalation weighted assets will not impair adequacy significantly ratio continue well above benchmark 9 %. role Indian bank regulator is laudable regard it studiously inspecting ratios both site off appraisal banks.