BASEL II NORMS - OPPORTUNITIES and CHALLENGES FOR BANKS IN INDIA.

Globalization has resulted in making world a small local economy. All the businesses have easy access to other players in the same industry in any part of the world. So it is very important to be competitive and maintain that sustainable advantage. The same logic holds true for banks across the world. The benefit is catering to customers abroad and sourcing funds from other countries, but banks are exposed to a variety of risks in global financial system. One such robust international regulatory framework is Basel norms, which promotes risk management mechanism and ensures financial stability. It is implemented by majority central banks of various countries. India too adopted Basel II framework in the year 2009. The present research paper highlights the significant features of Basel II Accord for the overall banking system. It discusses the impact of Basel II guidelines with reference to how it will change banking practices in India and what are the opportunities created post implementing Basel II norms. The study then focuses on mentioning some of the challenges faced by banks in India for adopting the regulations as mentioned in the Basel II Accord.