With the successful implementation of banking sector reforms over the past decade, the Indian banking system has shown substantial improvement on various parameters. It has become robust and displayed significant resilience to shocks. There is ample evidence of the capacity of the Indian banking system to migrate smoothly to Basel II norms. BIS Review 89/2006  1  Why Basel II?
I now propose to discuss a fundamental issue which has been raised and addressed in the context of Basel II implementation not only in India but elsewhere – “Why implement Basel II?” Many of us who are from the financial sector are aware of the main incentives for adoption of Basel II.