CAPITAL:

The capital requirement (as weighed for risky assets) for Banks was more than doubled.

LEVERAGE:

 Leverage basically means buying assets with borrowed money to multiply the gain. The underlying belief is that the asset will return the investor more than the interest he has to pay on the loan.
Funding and liquidity Banks can be subjected to a lot of risk if all depositors come and ask all their money at the same time. This is a hypothetical situation, but it has happened in real with Lehman Brothers – the bank whose collapse gave us the 2008 recession. 

So, Basel III puts a requirement for the banks to maintain some liquid assets all the time. Liquid assets are those which can be easily converted to cash.

D-SIB: DOMESTIC SYSTEMATIC IMPORTANT BANKS

RBI identifies banks that ‘too big to fail’ (if they fail, it’ll severely hurt the economy)’and labels the mas DOMESTICSYSTEMATICIMPORTANTBANKS(D-SIB), & orders the m keep additional equity capital against their RISKWEIGHTASSETS(RWA). Presently, 3 D-SIB India ICICI, HDFC, SBI

MISSION INDHRA DHANUSH

The government of India, in order to resolve the issues faced by the Public Sector Banks launched a 7 pronged plan called “MISSION INDHRADHANUSH. Indhradhanush for PSBs mission Aims At revamping the functioning of the Public Sector Banks in order to enable them to compete with the Private Sector Banks. It seeks to revive economic growth by means of reduction of political interference in the functioning of PSBs and improving credit.

COMPONENTS OF MISSION INDRADHANUSH

• APPOINTMENTS: Besides induction of talent from the Private Sector into the public banks, separation of the posts of Chief Executive Officer and the Managing Director, in order to check the excessive concentration of power and smooth functioning of the banks.
• BANK BOARDS BUREAU: The appointments Board of the Public Sector Banks would be replaced by the Bank Boards Bureau (BBB). Advice would be rendered to the banks in the matters of raising funds, mergers and acquisitions etc by the BBB. It would also hold the bad assets of the Public Sector Banks. The BBB separates the functioning of the PSBs from the government by acting as a middleman.
• CAPITALISATION: Due to the high NPAs and the need to meet the provisions of the Basel III norms, capitalization of banks by inducing Rs. 70000 crore was planned.
• DE-STRESSING: Solving issues arising in the infrastructure sector in order to check the stressed assets in the banks by strengthening the asset reconstruction companies. Development of a vibrant debt market for PSBs.
• EMPOWERMENT: Providing greater flexibility and autonomy to PSBs in hiring manpower.
• FRAMEWORK OF ACCOUNTABILITY: The assessment of the banks would be based on a few key performance indicators. 

BANK BOARD BUREAU (BBB),2016

BANKS BOARD BUREAU (BBB) is an autonomous body of the Government of India tasked to improve the governance of Public Sector Banks, recommend selection of chiefs of government owned banks and financial institutions and to help banks in developing strategies and capital raising plans.

The BBB works as step towards governance reforms in Public Sector Banks (PSBs) as recommended by P.J. NAYAK COMMITTEE. It was part of the Indhradhanush plan.