The Basel III norms, new global capital rules for banks, will take effect April 1, 2013 rather than January 1, the Reserve Bank of India (RBI) confirmed.

When asked for the reason for the postponement of the deadline, the central bank said it would align the implementation of the new rules with the beginning of the tax year, which runs from April through March.

Earlier, the start of Basel III implementation process was set on January 1, keeping in view the globally agreed implementation schedule by the BCBS (Basel Committee on Banking Supervision).

Created by global regulators to reinforce banking systems following the financial crisis, the Basel III rules will make Indians banks to hold core capital of at least 7 per cent of so-called risk weighted assets.

The implementation of the new international risk mechanism is also expected to put pressure on earnings of banks as they will be forced to meet higher capital requirements.

The new rules will be implemented in a phased manner and the implementation process is expected to be complete by March 31, 2018.