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SBI 'will meet India Basel II deadline'

The State Bank of India (SBI) will be ready to meet the Basel II protocols by the March 2007 deadline imposed by India's central bank, SBI's chairman has said.

Speaking at a Bharat Chamber of Commerce meeting, chairman A K Purwar gave assurances that the SBI would be compliant with the new Basel accord by the deadline, and that international consultants has been brought in to facilitate the implementation of the new rules.

Mr Purwar added that he saw no reason why Basel II implementation would have any effect on the bank's profitability, saying: "There will be no impact on the bottom-line for implementing Basel II norms."

The move is a boost for supporters of Basel II – officially called the New Basel Capital Accord – which provides guidelines for banks to protect them against possible market crashes.

Previously, many central banks including India's had expressed reservations about the new rules, saying that their global implementation would unfairly hamper the financial industries of developing countries – India and China in particular.

The RBI for its part has argued that only those Indian banks with at least 20 per cent of foreign business need implement the accord, although it would personally carry out implementation.