In Indias banking regulator, Reserve Bank of India (RBI) has rescheduled the start date for implementing Basel III to April 1, 2013 from January 1, 2013, giving a breather to CIOs and senior IT professionals from the banking domain. The latest version of the Basel norms mandates a fair bit of investment on the risk management side and greater efficiency across banks information management systems.
RBIs announcement comes in the wake of Basel Committees decision, earlier this month, to extend the deadline for members which are still working towards issuing final versions of the regulatory norms for to be implemented in their respective jurisdictions.
Unlike Basel I and Basel II which were focused on credit risks and measurement of risk, respectively, Basel III norms focus more prominently on two areas viz. solvency and liquidity. Essentially, these norms are designed to ensure that banks have sufficient capital to return deposits in stressful scenarios and are able to endure long periods of liquidity crunch.
In terms of IT impact, the impending norms will require that bank invest in a solid risk management and measurement system. It also mandates a comprehensive liquidity management process for which all the relevant data will need to be consolidated in one mart, in real-time, which in turn means investing in CDC, ETL, DW and Middleware technologies.
Experts believe that for complying with Basel III norms, banks will need to ensure that data across information systems is consistent, accurate and can be correlated across various divisions and asset classes.
Earlier, the Reserve Bank of India had issued guidelines on implementation of Basel III capital regulation in India on May 2, 2012. These guidelines were to be implemented as on January 1, 2013 in a phased manner and were to be fully implemented as on March 31, 2018.
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