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@article{204610,
        author = {Rushabh Pandit and CA Dr Shyamsundar Das},
        title = {Impact of Basel III Norms on Capital Adequacy & Risk Management in Indian Banks},
        journal = {International Journal of Innovative Research in Technology},
        year = {2026},
        volume = {13},
        number = {1},
        pages = {2956-2966},
        issn = {2349-6002},
        url = {https://ijirt.org/article?manuscript=204610},
        abstract = {The implementation of Basel III regulatory standards represents a landmark event in the evolution of the Indian banking sector. Designed to address the structural vulnerabilities exposed by the 2008 Global Financial Crisis, Basel III reforms aim to enhance the quality and quantity of bank capital, introduce stringent liquidity monitoring, and establish non-risk-based leverage constraints. This research paper evaluates the long-term impact of these standards on the capital adequacy, asset quality, risk management frameworks, and profitability of Scheduled Commercial Banks (SCBs) in India over a decadal horizon spanning from 2015 to 2025.
Employing a comprehensive empirical analysis based on regulatory data published by the Reserve Bank of India (RBI), this study reveals an extraordinary transition. System-wide Capital to Risk-Weighted Assets Ratios (CRAR) surged from 12.94% in March 2015 to 17.36% by March 2025, driven by aggressive public sector recapitalization and robust private sector capital accumulation. Simultaneously, Gross Non-Performing Assets (GNPA) declined from a historic peak of 11.18% in March 2018 to a multi-decadal low of 2.2% in March 2025, while Net Non-Performing Assets (NNPA) fell to 0.5%, indicating highly fortified balance sheets.
However, this transition is characterized by a "double-edged sword" dynamic. Stricter capital standards and the introduction of the Capital Conservation Buffer (CCB) have compressed Return on Equity (ROE) in the short term for highly capitalized institutions due to capital underutilization and the high cost of equity. Furthermore, the co-existence of domestic Statutory Liquidity Ratio (SLR) requirements and Basel III Liquidity Coverage Ratio (LCR) standards has introduced liquidity friction, compressing net interest margins.},
        keywords = {},
        month = {June},
        }