| Abstract | The international banking regulation is known as “Basel” released in 1988 for strengthening of the banks. Later it has been improved for two versions; last one is called “Basel-III regulation”. This regulation ensures the soundness of the banks by focusing on the increase of capital level and some other criteria. Yet, it comes with several draw backs, especially with the decrease of banking profitability. The regulation is, of course, vital for the banks in emerging countries. Therefore, the purpose of this paper is to find out whether the banks are ready to take challenges of the new accord or not. From three main regulations from Basel III, there are the new capital level, leverage ratio and liquidity standards. The finding from first pillar, 5.1, concludes that Most of the banks have quite high capital level, 7.70% of RWA for CET1 and 9.82% of RWA for total capital ratio(December 2012) which almost satisfy updated minimum required ratio by BB of 7% and 10% respectively. An important thing is to be noted that, CAR has been above 10% for the last six quarter of analysis. Another aspect to consider is leverage ratio. The Banking industry ratio of is 3.51% (December 2012) of total asset, which passes 3% requirement of regulation. It refers that leverage ratio can be adopted in banking sector of Bangladesh at the moment. The last consideration goes to liquidity standards. The liquidity situations is considered to be in the good situation though we cannot evaluate with new Basel accord as it is yet to be defined by Bangladesh Bank. In this context and with the reference to the analysis discussed, Banks of Bangladesh are in profound position to conform to BASEL-III Proposition with some exceptions. Moreover Basel-III contents are well structured to fit into the existing regulatory framework of capital adequacy in Bangladesh. This project has been analyzed by introducing Banking industry situation for Basel-II implementation from 2009 -2012 as the finding. These are compared and discussed with the pillars of Basel-III regulation, which has been divided into new minimum capital level, leverage ratio and liquidity standard provided by Bank for International Settlements (BIS).
Finally, this paper takes 10 different Commercial Banks from representative sector operating in Bangladesh as sample from 47 Banks operating in Bangladesh to analyze the preparedness for Basel-III. Sample Banks questionnaires also show that banks are quite in a position to adopt the new accord with some exceptions. And study analysis and findings also suggest that there is no need for the Banks to adopt all main regulations from Basel-III at the moment. Only Capital Ratio, Leverage Ratio would be good choice for the banks to consider right now along with parallel run with Basel=II regulations. |