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@ K Swaminathan:

Thanks for replying. Strong views those on BIS and I respect that.

The reality is that all central Banks the Fed in US, ECB in Europe or RBI in India are looking at more regulation with or without Basel III and the Banks have to do business and remain profitable.

More regulations for capital adequacy directly hits cost of operations as the Banks have to leave aside funds to meet various capital adequacy requirement and have to spend more effort towards greater level of regulatory reporting. It is here that technology comes in to help banks to automate much of the regulatory reporting and compliance related effort.

Also, Basel III will be implemented in a phased manner beginning next year (2013). The 5 year window has been given so that it does not impact growth significantly.

@ ketharaman Swaminathan:

For the first point, agreed that the opposition for Golden Share in India in the near future will be too much for the government to implement it. So, that really leaves the 2nd option of creating a Banking holding Company. This in itself will not be easy either.

For your second point, at current levels the Public Sector Banks are well capitalized, but looking at the growth expected for Banks and the financial tightrope government finds itself.. from where ll the funds to recapitalize banks come for the government to maintain its majority stake in PSBs. That is the larger question that needs to be addressed. Basel III may not be required urgently for Banks in India, but in 5 years' time thing might be different.