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Basel disclosure by private and public sector banks in India: assessment and implications

Basel disclosure by private and public sector banks in India: assessment and implications PurposeThe aim of this paper is to assess the nature and characteristics of regulatory risk management reporting by private and public sector banks in India.Design/methodology/approachUsing a sample of 38 banks, a content analysis of their Basel II disclosure reports for the year 2012-2013 is examined.FindingsThe assessment shows that while the majority of the disclosure across banks focuses on credit risk and capital adequacy ratios, the total quantity of disclosure varies significantly across banks. Of the three broad risk categories (market, credit and operational), operational risk disclosure is the least, with minimal to no disclosure on several key aspects of operational risk, suggesting that operational risk issues are likely to emerge as an area of concern among Indian banks. Further, for the sector as a whole, the authors observe that asset size and net income are positively correlated with the quantity of regulatory disclosure and negatively correlated with the variation of this disclosure, suggesting a possible precautionary behavior on the part of larger and more profitable banks toward excessive scrutiny by the regulators and a regulatory regime in which no institution is too big to fail.Originality/valueAs an exploratory research article to address the characteristics of regulatory disclosure of private and public sector banks in India, it is informative, particularly for those working in the area of banking regulation and compliance. Areas for further research are suggested. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Journal of Financial Regulation and Compliance Emerald Publishing

Basel disclosure by private and public sector banks in India: assessment and implications

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References (26)

Publisher
Emerald Publishing
Copyright
Copyright © Emerald Group Publishing Limited
ISSN
1358-1988
DOI
10.1108/JFRC-12-2015-0065
Publisher site
See Article on Publisher Site

Abstract

PurposeThe aim of this paper is to assess the nature and characteristics of regulatory risk management reporting by private and public sector banks in India.Design/methodology/approachUsing a sample of 38 banks, a content analysis of their Basel II disclosure reports for the year 2012-2013 is examined.FindingsThe assessment shows that while the majority of the disclosure across banks focuses on credit risk and capital adequacy ratios, the total quantity of disclosure varies significantly across banks. Of the three broad risk categories (market, credit and operational), operational risk disclosure is the least, with minimal to no disclosure on several key aspects of operational risk, suggesting that operational risk issues are likely to emerge as an area of concern among Indian banks. Further, for the sector as a whole, the authors observe that asset size and net income are positively correlated with the quantity of regulatory disclosure and negatively correlated with the variation of this disclosure, suggesting a possible precautionary behavior on the part of larger and more profitable banks toward excessive scrutiny by the regulators and a regulatory regime in which no institution is too big to fail.Originality/valueAs an exploratory research article to address the characteristics of regulatory disclosure of private and public sector banks in India, it is informative, particularly for those working in the area of banking regulation and compliance. Areas for further research are suggested.

Journal

Journal of Financial Regulation and Compliance – Emerald Publishing

Published: Nov 14, 2016

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