Also, while advanced approaches under Basel II have been strengthened, the calibration of standardised risk weights is yet to be comprehensively effected. And more importantly, Indian banks have not so far been  6  BIS central bankers’ speeches  subjected to Pillar 2 capital requirement under Basel II. Thus, the higher prescription addresses any potential concerns relating to undercapitalisation of risky exposures.
It should also be noted in this context that even under the Basel I and Basel II regimes, the Reserve Bank’s prescriptions were a percentage point higher than the international norms. Experience shows that this prudence on our part had been helpful and was positive on the cost-benefit calculus. 49. Please note that India has not been an outlier in prescribing higher capital standards.