“Meeting the minimum capital requirement is necessary, but not a sufficient condition for financial stability. Hence, it is imperative that the approach to risk management in banks should be in tune with the realisation of more frequent, varied and bigger risk events than in the past,” he said.
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Unknown titlethe minimum capital requirements of banks, which are calibrated based on historical loss events, may no longer be considered sufficient enough to absorb the losses in the present circumstances. <span>“Meeting the minimum capital requirement is necessary, but not a sufficient condition for financial stability. Hence, it is imperative that the approach to risk management in banks should be in tune with the realisation of more frequent, varied and bigger risk events than in the past,” he said. He said the supervisory approach of the RBI would be to further strengthen its focus on developing financial institutions’ ability to identify, measure, and mitigate the risks. “The new Summary
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