Multiple choice

The Reserve Bank of India has issued guidelines to banks on Pillar 2 of Basel II framework. Pillar 2 deals with which of the following?

(A) Better human resource management (B) Adequate capital to support risks (C) Better profitability with minimum number of employees

  1. Only (A)

  2. Only (B)

  3. Only (C)

  4. (A), (B) and (C)

  5. None of these
Reveal answer Fill a bubble to check yourself
E Correct answer
Explanation

Option (5) is correct. Pillar II is for supervisory review. Pillar II provides a framework for dealing with systemic risk, pension risk, concentration risk, strategic risk, reputational risk, liquidity risk and legal risk, which the accord combines under the title of residual risk. Banks can review their risk management system.

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