But the study also concludes that, on the basis of empirical review, the types of small business loans generally made by community banks - relationship-based loans, which community banks do so well - are so different from the types of loans made by larger banks, and so differently priced, that the competitive effects on community banks of Basel II application to large banks are likely to be insignificant.
  Provides appropriate incentives (penalties) to induce prudent behavior in the market place. This will encourage innovations and strong institutions to develop in the economy. Ladies and Gentlemen: The structural transformation experienced thus far is just but the beginning. The Central Bank and other players have earmarked several other reforms which are expected to take development of the financial sector to new frontiers.