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Re: Banking News.....
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maverick_ronnie
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Re: Banking News..... - December 28th, 2007

RBI asks regional rural banks to disclose CRAR


MUMBAI: In a move to impose greater financial discipline, the Reserve Bank on Friday asked all regional rural banks to disclose capital-to-risk-weighted- assets ratio, which indicates the solvency status, for 2007-08.

"In order to assess the capital structure of the RRBs, in the context of financial stability of the whole system, it is proposed that they should disclose the level of CRAR in their balance sheets," RBI said in a notification.

The roadmap for achieving the desired level of CRAR norms would be worked out later, it said.

Currently, RRBs are outside the purview of the CRAR framework. For scheduled commercial bank, the ratio is pegged at 9 per cent.

Under the proposed framework, the balance sheet assets and non-funded or off-balance sheet items will be assigned weights and banks have to compute the ratio of their capital funds to the aggregate of risk weighted assets and other off-balance sheet exposures, it said.

As of March 2007, total number of RRBs was 96 with the amalgamation of 145 such banks into 45 new RRBs. The total number of RRBs declined from 196 at end-March 2005 to 133 at end-March 2006.


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