Indian Banks Adjust Strategies to Meet Regulatory Capital Requirements, Impacting Risk-taking.
Indian banks adjusted their capital ratios from 2009-2018 to meet regulations. They did this by either increasing capital or reducing risky assets. Public and private banks had different strategies under Basel II and III. During Basel II, banks grew assets aggressively, leading to lower capital ratios, which they fixed by adding more capital. Under Basel III, banks cut back on asset growth and reduced risk to maintain their capital ratios.