With our major banks accredited to use their own risk measurement models for Basel 2 capital calculations, we put particular emphasis on ensuring that those capital models are calibrated to plausible economic downturn scenarios, rather than the relatively benign credit loss conditions of the past decade.
Empowering MFIs will facilitate their role as intermediary between the lending banks and the beneficiaries. The Union Finance Minister, in his Budget Speech 2005-06, has prescribed that the commercial banks should appoint MFIs as the ‘banking correspondents’ to provide transaction services on their behalf.