For example, capital adequacy requirements on the basis of risk-weighted assets vary within the region, the classification rules for non-performing assets differ widely, provisioning criteria are wide apart. Capital reserves representing surplus from the sale of assets are treated differently, the constituents of core capital prescribed by each central bank have large variation.
Second, related to this, the survey also established that the level of ”comparison shopping” for banking services and products is also low. This alludes to an information asymmetry problem. Information is indeed critical to the effective functioning of markets. It is not in doubt that when information on alternatives is readily available, the outcomes will be customer driven products and competitive price offerings.