The Reserve Bank has, therefore, started looking at the business models of banks more closely. Aspects or deficiencies in the business model itself can spark a crisis in due course. We have not only prescribed regulatory norms for capital adequacy and liquidity ratios, but even gone beyond to nudge banks to build up capital buffers in good times and times of plenty.
Given that the euro banknotes and coins will become legal tender only as of 1 January 2002, the Eurosystem will retain the ownership of all frontloaded euro cash until then. Credit institutions will be obliged to arrange appropriate coverage of the risks of anticipated public use, as well as of destruction or theft.