Credit risk: the Achilles’ heel of higher 3 capital under Basel norms
The financial crisis of 2008-09 emphasized that banks succumb to rising pressure of Non-Performing Assets (NPAs), which affects their long-term sustainability and growth. Though India remained relatively unaffected by the crisis, the present state of NPAs in the country is rather alarming even af...
| Main Authors: | , , |
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| Format: | Journal Article |
| Published: |
2020
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| Online Access: | http://hdl.handle.net/20.500.11937/95107 |
| _version_ | 1848765969478975488 |
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| author | Rizvi, Noor Kashiramka, Smita Singh, Shveta |
| author_facet | Rizvi, Noor Kashiramka, Smita Singh, Shveta |
| author_sort | Rizvi, Noor |
| building | Curtin Institutional Repository |
| collection | Online Access |
| description | The financial crisis of 2008-09 emphasized that banks succumb to rising pressure
of Non-Performing Assets (NPAs), which affects their long-term sustainability and
growth. Though India remained relatively unaffected by the crisis, the present state
of NPAs in the country is rather alarming even after adhering to the Basel norms
for decades. In the light of these concerns, this study investigates whether NPAs
are an Achilles’ heel of adopting higher Capital Adequacy Requirements (CAR) of
Basel norms, introduced to bring financial stability. Panel regression has been
employed on a sample of 46 banks for the period 2005-2018, to include both Basel
II and III regimes to draw better conclusions about the relationship. To delve deeper,
a disaggregative analysis based on the ownership of banks and accounting for the
effects of Global Financial Crisis (GFC) is carried out. The study reveals a positive
relationship between the two, post crisis. However, the possible explanation for this
relationship is different from the explanation usually stated for developed countries
that observe a similar relation. |
| first_indexed | 2025-11-14T11:43:42Z |
| format | Journal Article |
| id | curtin-20.500.11937-95107 |
| institution | Curtin University Malaysia |
| institution_category | Local University |
| last_indexed | 2025-11-14T11:43:42Z |
| publishDate | 2020 |
| recordtype | eprints |
| repository_type | Digital Repository |
| spelling | curtin-20.500.11937-951072024-09-03T04:48:29Z Credit risk: the Achilles’ heel of higher 3 capital under Basel norms Rizvi, Noor Kashiramka, Smita Singh, Shveta The financial crisis of 2008-09 emphasized that banks succumb to rising pressure of Non-Performing Assets (NPAs), which affects their long-term sustainability and growth. Though India remained relatively unaffected by the crisis, the present state of NPAs in the country is rather alarming even after adhering to the Basel norms for decades. In the light of these concerns, this study investigates whether NPAs are an Achilles’ heel of adopting higher Capital Adequacy Requirements (CAR) of Basel norms, introduced to bring financial stability. Panel regression has been employed on a sample of 46 banks for the period 2005-2018, to include both Basel II and III regimes to draw better conclusions about the relationship. To delve deeper, a disaggregative analysis based on the ownership of banks and accounting for the effects of Global Financial Crisis (GFC) is carried out. The study reveals a positive relationship between the two, post crisis. However, the possible explanation for this relationship is different from the explanation usually stated for developed countries that observe a similar relation. 2020 Journal Article http://hdl.handle.net/20.500.11937/95107 restricted |
| spellingShingle | Rizvi, Noor Kashiramka, Smita Singh, Shveta Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title | Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title_full | Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title_fullStr | Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title_full_unstemmed | Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title_short | Credit risk: the Achilles’ heel of higher 3 capital under Basel norms |
| title_sort | credit risk: the achilles’ heel of higher 3 capital under basel norms |
| url | http://hdl.handle.net/20.500.11937/95107 |