The transition from Basel I to Basel II was effected seamlessly in March 2009, after a year-long parallel run. While applying the Basel II risk-weighting system, the domestic scenario and market conditions were always borne in mind.
Banks were not given the option of moving over to advanced approaches because of serious reservations and uncertainties regarding the reliability of models built on a thin database. The lower risk weight of 35 per cent on residential mortgages was only allowed to be applied very restrictively.