Banking Exam Question - What is BASEL-III Standards in Banking? What are the Functions, Objectives, Features & Three Pillars of BASEL-III? Explain

Introduction - BASEL III

Basel III is a worldwide, willful administrative system on bank capital sufficiency, push testing, and market liquidity chance. It was settled upon by the individuals from the Basel Committee on Banking Supervision in 2010– 11, and was planned to be presented from 2013 until 2015; be that as it may, changes from 1 April 2013 expanded usage until 31 March 2018 and again stretched out to 31 March 2019. The third portion of the Basel Accords (see Basel I, Basel II) was produced because of the inadequacies in monetary control uncovered by the money related emergency of 2007– 08. Basel III is planned to reinforce bank capital prerequisites by expanding bank liquidity and diminishing bank use.

The Basel III standard aims to strengthen the requirements from the Basel II standard on bank's minimum capital ratios. In addition, it introduces requirements on liquid asset holdings and funding stability, thereby seeking to mitigate the risk of a run on the bank.