As you are aware, RBI has already issued the guidelines for the new capital adequacy framework in regard to Pillar 1 and Pillar 3 on April 27, 2007. As regards Pillar 2, the banks have been advised to put in place an ICAAP, with the approval of the Board.
A two-stage implementation of the guidelines is envisaged to provide adequate lead time to the banking system. Accordingly, the foreign banks operating in India and the Indian banks having operational presence outside India are required to migrate to the Standardised Approach for credit risk and the Basic Indicator Approach for operational risk with effect from March 31, 2008.