ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846
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Will Basel II Norms Slow Financial Inclusion?

The Basel II norms, which will cover all banks by March 2009, will introduce tightly controlled and comprehensive coverage of risks that could militate against financial inclusion. The norms may not per se be against the spread of bank lending to those who are now excluded, but with the inherent biases in the functioning of the banking system, banks will seek cover under the norms to half-heartedly move towards inclusion. With serious inter-regional, inter-class and inter-sectoral disparities in banking services in India, the approach should be based on a calibrated balancing of prudential norms and the provision of genuinely inclusive as well as regionally and functionally well-spread services.

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