up to one year) on banks incorporated in non-OECD countries carries a risk weight of only 20 per cent, whereas long-term claims on banks in non-OECD countries carry a risk weight of 100 per cent. The new Capital Adequacy Framework, which has just been issued by the BIS as a consultative paper for comments, is reviewing this norm.
Most of the above proposals have the effect of increasing the cost of short-term debt. Hence, these developments would be of interest to the corporate sector. In India, we carefully monitor short-term debt. We maintain a difference in treatment between trade- and non-trade-related debt.