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Q65 (IAS/2015) Economy › Money, Banking & Inflation › Banking regulation reforms Official Key

Basel III Accord' or simply 'Basel III', often seen in the news, seeks to

Result
Your answer: —  ·  Correct: B
Explanation

Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09.[1] The measures aim to strengthen the regulation, supervision and risk management of banks.[1] The main objectives of Basel III are to improve the banking sector's ability to absorb shocks arising from financial and economic stress, improve risk management and governance, and strengthen banks' transparency and disclosure.[2]

Option B correctly captures the essence of Basel III, which focuses on improving the banking sector's resilience to financial stress and enhancing risk management. The other options are incorrect as they relate to entirely different international agreements: Option A refers to the Convention on Biological Diversity, Option C relates to climate change protocols like the Kyoto Protocol, and Option D pertains to the Montreal Protocol on ozone-depleting substances.

Sources
  1. [1] https://www.bis.org/bcbs/basel3.htm
  2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
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Q. Basel III Accord' or simply 'Basel III', often seen in the news, seeks to [A] develop national strategies for the conservation and susta…
At a glance
Origin: Books + Current Affairs Fairness: Low / Borderline fairness Books / CA: 2.5/10 · 7.5/10
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Statement 1
Does the Basel III Accord aim to develop national strategies for the conservation and sustainable use of biological diversity?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 1/5
"Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks."
Why this source?
  • Explicitly describes Basel III as an international regulatory framework for banks.
  • States the measures aim to strengthen regulation, supervision and risk management of banks — a financial stability objective, not environmental or biodiversity policy.
Web source
Presence: 1/5
"The Basel III Accord is a comprehensive set of reforms developed by the Basel Committee on Banking Supervision ("BCBS", "Basel Committee") to enhance the stability and resilience of the global financial system. It aims not only to strengthen regulation, supervision, and risk management within the banking sector, but also to reduce systemic risks."
Why this source?
  • Frames the Accord as a comprehensive set of reforms to enhance stability and resilience of the global financial system.
  • Specifies aims are strengthening regulation, supervision and risk management within the banking sector, with no mention of biodiversity or national conservation strategies.
Web source
Presence: 1/5
"The Basel III accord is a set of financial reforms that was developed by the Basel Committee on Banking Supervision (BCBS), with the aim of strengthening regulation, supervision, and risk management within the banking industry."
Why this source?
  • Describes Basel III as a set of financial reforms aimed at strengthening regulation, supervision and risk management in the banking industry.
  • Focuses on banks' ability to handle financial stress and improve transparency — again a financial/regulatory remit, not biodiversity or conservation.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
Strength: 5/5
“Basel III: In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008. A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged (high debt) and had a greater reliance on short-term funding. Also, the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk. Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive. The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage/debt, funding and liquidity.”
Why relevant

Defines Basel III as banking regulations focused on capital, leverage, funding and liquidity to make the banking system more resilient.

How to extend

A student could note the subject-matter (banking regulation) and use basic domain knowledge to judge that biodiversity strategy-making is outside typical Basel III objectives.

Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 28: International Organisation and Conventions > Strategic Goal A: > p. 394
Strength: 4/5
“Address the underlying causes of biodiversity loss by mainstreaming biodiversity across government and society • t. By zozo, at the latest, people are aware of the values of biodiversity and the steps they can take to conserve and use it sustainably. • z. By zozo, at the latest, biodiversity values have been integrated into national and local development and poverty reduction strategies and planning processes and are being incorporated into national accounting, as appropriate, and reporting systems. production and consumption and have kept the impacts of use of natural resources well within safe ecological limits.”
Why relevant

Describes Strategic Goal A: integrating biodiversity into national and local development and planning—an explicit formulation of 'national strategies' for biodiversity.

How to extend

One could infer that national biodiversity strategies are driven by environmental frameworks (not financial accords) and check whether Basel III is such a framework.

Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 28: International Organisation and Conventions > Objectives > p. 391
Strength: 4/5
“SIIANKAR The conservation of biological diversity, the sustainable use of its components and the fair and equitable sharing of the benefits arising out of the utilization of genetic resources, including by appropriate access to genetic resources and by appropriate transfer of relevant technologies, taking into account all rights over those resources and to technologies, and by appropriate funding. • (i) Conservation of biological diversity; • (ii) Sustainable use of its components; and • (iii) Fair and equitable sharing of the benefits arising from the utilization of genetic resources. The Act envisages a three-tier structure to regulate access to the biological resources, comprising of National Biodiversity Authority (NBA), State Biodiversity Boards (SBB) and Biodiversity Management Committees (BMC) at the local level.”
Why relevant

States the core objectives for conservation and sustainable use of biodiversity and mentions institutional mechanisms for implementation.

How to extend

A student can extend this to expect specialized biodiversity laws/institutions to develop national strategies, contrasting them with banking accords like Basel III.

Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 27: Environmental Organizations > 2ZB,z, Main functions: > p. 383
Strength: 4/5
“(r) The National Biodiversity Authority may- (a) advise the Central Government on matters relating to the conservation of biodiversity, sustainable use of its components and equitable sharing of benefits arising out of the utilization of biological resources; (b) advise the State Governments in the selection of areas of biodiversity importance to be notified as heritage sites and measures for the management of such heritage sites; (c) perform such other functions as may be necessary to”
Why relevant

Lists functions of the National Biodiversity Authority, including advising the central government on conservation and sustainable use—showing which bodies produce national strategies.

How to extend

Use this to reason that national biodiversity strategies are within the remit of biodiversity authorities rather than international banking accords.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > egin{array}{c|c|c|c|c} \\hline extbf{2015} & extbf{0} & extbf{0} \\[1ex] \ \hline \ \end{array} > p. 251
Strength: 3/5
“\begin{array}{c|c|c|c|c} \hline \textbf{2015} & \textbf{0} & \textbf{0} \\ \hline \end{array} • 27. 'Basel-III Accord' or simply 'Basel-III' often seen in the news seeks to • (a) develop national strategies for the conservation and sustainable use of biological diversity• (b) improve banking sector's ability to deal with financial and economic stress and improve risk management• (c) reduce the greenhouse gas emissions but place a heavier burden on developed countries• (d) transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals• 28.”
Why relevant

Shows a multiple-choice item that (incorrectly) includes 'develop national strategies for conservation of biological diversity' as an option for 'Basel-III Accord', highlighting a potential confusion of domains.

How to extend

A student could treat this as an example of a distractor and combine it with the Basel III description (snippet 5) to suspect the option is wrong and verify via domain comparison.

Statement 2
Does the Basel III Accord aim to improve the banking sector's ability to deal with financial and economic stress and improve risk management?
Origin: Direct from books Fairness: Straightforward Book-answerable
From standard books
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
Presence: 5/5
“The main objectives of Basel III are: • Improve the banking sector's ability to absorb shocks arising from financial and economic stress• Improve risk management and governance• Strengthen banks' transparency and disclosure Explanation: To understand Basel norms in a better way, let us understand the capital and risk weighted assets of banks i.e., Capital to Risk Weighted Asset Ratio (CRAR) or Capital Adequacy Ratio.”
Why this source?
  • Snippet explicitly lists Basel III main objectives including: 'Improve the banking sector's ability to absorb shocks arising from financial and economic stress'.
  • Same snippet also explicitly lists 'Improve risk management and governance' as a core objective.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 92
Presence: 4/5
“Banks accept deposit from the general public and they also raise capital from the financial markets through debt and equity. Banks then lend this money to different category of borrowers having different risk profile. The lending activity exposes banks to different kinds of risks which in many cases lead to the failure of banks and loss of depositor's wealth. Basel norms are provisions to tackle this risk of bank failures and to maintain a sound financial system in the economy. Basel, a city in Switzerland, is the headquarters of Bank for International Settlement (BIS), which fosters co-operation among Central Banks with a common goal of financial stability and common standards of banking regulations.”
Why this source?
  • Describes Basel norms as provisions to tackle risk of bank failures and to maintain a sound financial system, aligning with stress-absorption goals.
  • Frames Basel norms as regulatory responses to banks' exposure to varied risks from lending activities, supporting the risk-management purpose.
Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2 Money and Banking- Part I > p. 95
Presence: 3/5
“Scheduled Commercial Banks have achieved the minimum Basel III capital requirement. The higher the capital is above the regulatory minimum, the greater the freedom banks have to make loans. The closer bank capital is to the minimum, the less inclined banks are to lend. If capital falls below the regulatory minimum, banks cannot lend or face restrictions on lending. When loans go bad and turn into non-performing assets (NPAs) banks have to make provisions for potential losses (i.e., banks are required to keep certain funds in reserve which they can't lend and is called provisioning against NPAs). This tends to erode bank capital and put brakes on loan growth.”
Why this source?
  • States that banks have achieved Basel III capital requirements and links higher capital to greater lending freedom and resilience, implying stress-absorption intent.
  • Explains how inadequate capital (below regulatory minimum) restricts lending and is eroded by NPAs, connecting Basel III capital rules to risk management outcomes.
Statement analysis

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Statement 3
Does the Basel III Accord aim to reduce greenhouse gas emissions and place a heavier burden on developed countries?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"It aims not only to strengthen regulation, supervision, and risk management within the banking sector, but also to reduce systemic risks."
Why this source?
  • Explicitly states Basel III's objectives are financial: strengthening regulation, supervision, and risk management and reducing systemic risks.
  • Nowhere in the passage is there any mention of greenhouse gas emissions or differential burdens on developed countries, indicating the Accord's aims are not environmental.
Web source
Presence: 5/5
"Basel III is an internationally agreed set of measures developed by the Basel Committee on Banking Supervision in response to the financial crisis of 2007-09. The measures aim to strengthen the regulation, supervision and risk management of banks."
Why this source?
  • Describes Basel III as measures developed in response to the 2007-09 financial crisis to strengthen regulation, supervision and risk management of banks.
  • Focus on banking-sector resilience and financial stability does not reference emissions reduction or placing heavier burdens on developed countries.
Web source
Presence: 4/5
"The Basel III accord is a set of financial reforms that was developed by the Basel Committee on Banking Supervision (BCBS), with the aim of strengthening regulation, supervision, and risk management within the banking industry."
Why this source?
  • Summarizes Basel III as a set of financial reforms aimed at strengthening regulation, supervision and risk management within the banking industry.
  • Frames Basel III as a response to the 2008 Global Financial Crisis and improving banks' ability to handle shocks—no environmental or developed-country burden objectives are mentioned.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
Strength: 5/5
“Basel III: In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008. A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged (high debt) and had a greater reliance on short-term funding. Also, the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk. Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive. The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage/debt, funding and liquidity.”
Why relevant

Defines Basel III's stated aims (strengthening banks after the 2008 crisis: capital, leverage, funding, liquidity), which are financial/banking concepts not climate obligations.

How to extend

A student can use this to infer Basel III is a banking-regulation framework and thus unlikely to be a climate treaty imposing emissions cuts or differentiated burdens.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > egin{array}{c|c|c|c|c} \\hline extbf{2015} & extbf{0} & extbf{0} \\[1ex] \ \hline \ \end{array} > p. 251
Strength: 5/5
“\begin{array}{c|c|c|c|c} \hline \textbf{2015} & \textbf{0} & \textbf{0} \\ \hline \end{array} • 27. 'Basel-III Accord' or simply 'Basel-III' often seen in the news seeks to • (a) develop national strategies for the conservation and sustainable use of biological diversity• (b) improve banking sector's ability to deal with financial and economic stress and improve risk management• (c) reduce the greenhouse gas emissions but place a heavier burden on developed countries• (d) transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals• 28.”
Why relevant

Includes a multiple‑choice item listing (b) banking risk-management aims for Basel‑III and (c) a climate-related aim (reduce GHG and heavier burden on developed countries) as an alternative option, implying (c) is not the Basel‑III objective.

How to extend

A student could treat the MCQ structure as evidence that (c) is presented as an incorrect distractor and combine it with [4] to rule out the climate interpretation.

Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 6: Environment and Natural Resources > Common but Differentiated Responsibilities > p. 87
Strength: 4/5
“It was also acknowledged that per capita emissions in developing countries are still relatively low. China, India, and other developing countries were, therefore, exempted from the requirements of the Kyoto Protocol. The Kyoto Protocol is an international agreement setting targets for industrialised countries to cut their greenhouse gas emissions. Certain gases like Carbon dioxide, Methane, Hydrofluoro carbons etc. are considered at least partly responsible for global warming - the rise in global temperature which may have catastrophic consequences for life on Earth. The protocol was agreed to in 1997 in Kyoto in Japan, based on principles set out in UNFCCC.”
Why relevant

Explains the international climate principle 'common but differentiated responsibilities' that underpins placing heavier burdens on developed countries in climate agreements (e.g., Kyoto Protocol).

How to extend

A student could use this rule to recognize that 'placing a heavier burden on developed countries' is characteristic of climate treaties, not banking accords like Basel III.

Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 6: Environment and Natural Resources > SACRED GROVES IN INDIA > p. 89
Strength: 3/5
“emission of greenhouse gases during the industrialisation period (that is believed to be causing today's global warming and climate change) was not significant. However, the critics of the Kyoto Protocol point out that sooner or later, both India and China, along with other developing countries, will be among the leading countributors to greenhouse gas emissions. At the G-8 meeting in June 2005, India pointed out that the per capita emission rates of the developing countries are a tiny fraction of those in the developed world. Following the principle of common but differentiated responsibilities, India is of the view that the major responsibility of curbing emission rests with the developed countries, which have accumulated emissions over a long period of time.”
Why relevant

Notes criticisms and positions around Kyoto and differentiated responsibilities — reinforces that differentiated burdens are a feature of climate policy discourse.

How to extend

Combine this pattern with [4] to separate climate-policy instruments (which adopt differentiated burdens) from Basel III's banking regulatory objectives.

Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 7: Climate Change > adaptIve strategIes for clImate change mItIgatIon. > p. 21
Strength: 3/5
“It is also a fact, that emissions rising in developing countries but more due to exports to developed countries. Climate change mitigation is an action to decrease the emission and intensity of greenhouse gases in the atmosphere. Some of the important steps which can go a long way in reducing the emissions of greenhouse gases and ultimately in the mitigation of climate change have been given briefy in the following:”
Why relevant

Describes climate-mitigation as actions to reduce greenhouse-gas emissions and notes distributional aspects of emissions (developing vs developed), giving context on what measures aim to do.

How to extend

A student could compare the concrete aims and tools of climate mitigation (as outlined here) with the banking tools in Basel III to test whether Basel III plausibly pursues emissions reduction.

Statement analysis

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Statement 4
Does the Basel III Accord aim to transfer technology from developed countries to poor countries to enable them to replace the use of chlorofluorocarbons in refrigeration with harmless chemicals?
Origin: Web / Current Affairs Fairness: CA heavy Web-answerable

Web source
Presence: 5/5
"The Basel III Accord is a comprehensive set of reforms developed by the Basel Committee on Banking Supervision ("BCBS", "Basel Committee") to enhance the stability and resilience of the global financial system."
Why this source?
  • Defines Basel III as a comprehensive set of banking reforms to enhance financial stability and resilience.
  • Describes aims focused on regulation, supervision, risk management and reducing systemic risk — not technology transfer or environmental chemical substitution.
Web source
Presence: 5/5
"The Basel III accord is a set of financial reforms that was developed by the Basel Committee on Banking Supervision (BCBS), with the aim of strengthening regulation, supervision, and [risk management] within the banking industry."
Why this source?
  • States Basel III is a set of financial reforms aimed at strengthening regulation, supervision and risk management within the banking industry.
  • Focus on banking sector reforms shows no connection to environmental treaties or transfer of refrigeration technology.
Web source
Presence: 5/5
"The comprehensive reform package is designed to help ensure that banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns."
Why this source?
  • Describes the reform package as designed to ensure banks maintain strong capital positions and continue lending during downturns.
  • Emphasis on bank capital and supervision further indicates the Accord's scope is financial stability, not environmental technology transfer.

Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
Strength: 5/5
“Basel III: In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008. A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged (high debt) and had a greater reliance on short-term funding. Also, the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk. Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive. The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage/debt, funding and liquidity.”
Why relevant

Defines Basel III as banking guidelines introduced after the 2008 crisis to strengthen banks via capital, leverage, funding and liquidity rules.

How to extend

A student could combine this with basic knowledge of institutional mandates to judge that a banking-capital accord is unlikely to be a mechanism for environmental technology transfer.

Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > Basel-I Norms > p. 234
Strength: 4/5
“• In 1988, the Basel Committee on Banking Supervision (BCBS) introduced a capital measurement system called Basel Capital Accord, also known as Basel-I. • It focused only on credit risk. • It prescribed minimum capital requirement at 8 per cent of the Risk Weighted Assets (RWA) for banks. • India adopted Basel-I norms in the year 1999. Under Basel-I, the RBI issued guidelines to maintain a CRAR (Capital to Risk Assets Ratio) or CAR (Capital Adequacy Ratio) of 9 per cent by every SCB. CRAR - It is defined as the proportion of bank's total risk-weighted assets that are held in the form of shareholders' equity and certain other defined class of capital.”
Why relevant

Describes earlier Basel accords (Basel I) as capital measurement systems focused on credit risk and capital adequacy for banks.

How to extend

Use this pattern (Basel = banking supervision accords) to infer that 'Basel III' most likely continues in the banking/regulatory domain rather than environmental technology transfer.

Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 5: Biodiversity and Legislations > BaSEl convEntIon. > p. 11
Strength: 4/5
“Te Basel Convention was held to control the trans-boundary movement of hazardous wastes. It mainly focused on the transfer of hazardous wastes from the developing countries. Te Convention was opened for signature on 22nd March, 1989 and it entered 175 parties to the Convention.”
Why relevant

Explains the Basel Convention (different use of 'Basel' name) as controlling transboundary movement of hazardous wastes, an environmental treaty.

How to extend

A student could contrast the mandates: 'Basel Convention' (environmental) versus 'Basel Committee/Accords' (banking), to avoid conflating similarly named instruments and to test the claim about tech transfer.

Contemporary World Politics, Textbook in political science for Class XII (NCERT 2025 ed.) > Chapter 6: Environment and Natural Resources > SACRED GROVES IN INDIA > p. 90
Strength: 3/5
“A review of the implementation of the agreements at the Earth Summit in Rio was undertaken by India in 1997. One of the key conclusions was that there had been no meaningful progress with respect to transfer of new and additional financial resources and environmentally-sound technology on concessional terms to developing nations. India finds it necessary that developed countries take immediate measures to provide developing countries with financial resources and clean technologies to enable them to meet their existing commitments under UNFCCC. India is also of the view that the SAARC countries should adopt a common position on major global environment issues, so that the region's voice carries greater weight.”
Why relevant

States that developing countries seek transfer of environmentally-sound technology and finance from developed countries to meet UNFCCC commitments.

How to extend

Combine this with knowledge of actual environmental treaty mechanisms to note that tech transfer is a recognized objective in environmental diplomacy, but typically tied to climate/ocean treaties rather than banking accords.

Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 17: Climate Change > Substitution for Ozone-Depleting Substances: > p. 257
Strength: 3/5
“• Hydrofluorocarbons are used as refrigerants, aerosol propeilants, solvents, and fire retardants. These chemicals were developed as a replacement for chlorofluorocarbons (CFCs) and hydrochloroi"luorocarbons (HCFCs) because they do not deplete the stratospheric ozone layer. • Unfortunately, HFCs are potent greenhouse gases with long atmospheric lifetimes and high GWPs, and they are released into the atmosphere through leaks, servicing, and disposal of equipment in which they are used.”
Why relevant

Explains that HFCs were developed to replace CFCs (they don't deplete ozone) but are potent greenhouse gases—context on refrigerant substitution.

How to extend

Use this to identify the specific technical topic (refrigerant replacement) and then check which international agreements or mechanisms deal with such tech transfer (e.g., Montreal Protocol related mechanisms), not Basel III.

Statement analysis

This statement analysis shows book citations, web sources and indirect clues. The first statement (S1) is open for preview.

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Pattern takeaway: UPSC creates difficulty by 'Definition Swapping'. They take the definition of Treaty X (Environment) and put it as an option for Accord Y (Economy). Your study pattern must involve categorizing international agreements by their 'Parent Domain' (Finance vs. Environment vs. Trade) to bulletproof your elimination.
How you should have studied
  1. [THE VERDICT]: Sitter. Directly covered in standard texts like Vivek Singh (Ch. 2) and Nitin Singhania (Ch. 8).
  2. [THE CONCEPTUAL TRIGGER]: Banking Sector Reforms & Global Financial Stability (specifically the post-2008 crisis response).
  3. [THE HORIZONTAL EXPANSION]: Memorize the Basel III pillars: Capital Adequacy Ratio (CAR/CRAR), Liquidity Coverage Ratio (LCR), Net Stable Funding Ratio (NSFR), and Counter-cyclical Capital Buffer (CCCB). Contrast with the distractors: Option A is CBD/Nagoya; Option D is Montreal Protocol.
  4. [THE STRATEGIC METACOGNITION]: Recognize the 'Cross-Domain Distractor' technique. UPSC tests your confidence by mixing Financial terms with Environmental definitions. If the term is Economic, immediately discard options talking about GHG, Biodiversity, or CFCs.
How to study

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Concept hooks from this question
📌 Adjacent topic to master
S1
👉 Objectives of Basel III
💡 The insight

Directly relevant to the claim because Basel III's purpose determines whether it could plausibly target biodiversity strategies.

High-yield for economy/finance questions: knowing Basel III's aims (capital, leverage, liquidity, risk management) helps distinguish financial regulatory accords from environmental treaties. Links to banking regulation, financial crisis responses, and macroprudential policy. Learn by memorizing core pillars and reading short summaries from standard sources.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
🔗 Anchor: "Does the Basel III Accord aim to develop national strategies for the conservatio..."
📌 Adjacent topic to master
S1
👉 National biodiversity strategies & mainstreaming
💡 The insight

The statement mentions 'develop national strategies for conservation and sustainable use of biological diversity', which aligns with topics on mainstreaming biodiversity into national/local planning.

Important for environment/conventions questions: UPSC often asks about national biodiversity strategies, Aichi/Kunming goals and mainstreaming biodiversity into development planning. Study treaty goals and national policy instruments; practice by comparing aims of environmental conventions.

📚 Reading List :
  • Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 28: International Organisation and Conventions > Strategic Goal A: > p. 394
  • Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 28: International Organisation and Conventions > Objectives > p. 391
🔗 Anchor: "Does the Basel III Accord aim to develop national strategies for the conservatio..."
📌 Adjacent topic to master
S1
👉 Role of National Biodiversity Authority (NBA) and institutional mechanisms
💡 The insight

Clarifies which national institutions actually advise on conservation and sustainable use, helping to evaluate whether an entity like Basel III could be responsible.

Useful for governance/environment synergy questions: understanding NBA/SBB/BMC roles explains administrative mechanisms for biodiversity policy and benefit-sharing. Memorize institutional structures and functions; connect to biodiversity legislation and implementation questions.

📚 Reading List :
  • Environment, Shankar IAS Acedemy .(ed 10th) > Chapter 27: Environmental Organizations > 2ZB,z, Main functions: > p. 383
  • Environment and Ecology, Majid Hussain (Access publishing 3rd ed.) > Chapter 5: Biodiversity and Legislations > BIodIvErSIty act, 2002. > p. 17
🔗 Anchor: "Does the Basel III Accord aim to develop national strategies for the conservatio..."
📌 Adjacent topic to master
S2
👉 Basel III: stated objectives
💡 The insight

Reference [1] explicitly lists Basel III goals: improving banks' ability to absorb shocks and improving risk management and governance.

High-yield for UPSC financial sector questions because questions often ask about objectives and implications of international banking accords; links to topics on financial stability, regulation and systemic risk. Master by memorizing core objectives and practicing application-based questions (e.g., effects on lending, NPAs, bank behaviour).

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2 Money and Banking- Part I > p. 95
🔗 Anchor: "Does the Basel III Accord aim to improve the banking sector's ability to deal wi..."
📌 Adjacent topic to master
S2
👉 Capital adequacy (CRAR/CAR) and Risk-Weighted Assets
💡 The insight

References [1], [5], and [10] reference CRAR/CAR and capital requirements as mechanisms underpinning Basel norms and their effect on bank resilience.

Frequently tested concept: exam questions link capital norms to bank behaviour, lending capacity, and systemic stability. Understand definitions (CRAR/CAR), role of risk-weighted assets, and how capital buffers affect NPAs and credit flow. Revise via diagramming balance-sheet impacts and solving numerical CRAR examples.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
  • Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 8: Financial Market > Basel-I Norms > p. 234
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2 Money and Banking- Part I > p. 95
🔗 Anchor: "Does the Basel III Accord aim to improve the banking sector's ability to deal wi..."
📌 Adjacent topic to master
S2
👉 Basel norms as tools to prevent bank failure and enhance transparency
💡 The insight

Reference [4] presents Basel norms as provisions to tackle bank failure risk and promote a sound financial system; [1] mentions strengthening transparency and disclosure.

Useful for policy-analysis and essay-type UPSC questions on financial regulation and systemic risk. Helps connect international standards to domestic regulatory measures (RBI actions, PCA, AQR). Prepare by linking norms to case studies (bank failures, AQR) and policy responses.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 92
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
🔗 Anchor: "Does the Basel III Accord aim to improve the banking sector's ability to deal wi..."
📌 Adjacent topic to master
S3
👉 Basel III: objectives and key focus (capital, leverage, funding, liquidity)
💡 The insight

The statement attributes environmental aims to Basel III; the provided evidence describes Basel III as a banking regulation focused on capital, leverage, funding and liquidity, so understanding its true purpose is directly relevant.

High-yield for UPSC Economy/Banking: questions often ask about post‑2008 regulatory reforms and their objectives. Mastering Basel III helps distinguish financial-regulatory instruments from environmental treaties and supports answers on financial stability, regulatory architecture, and crisis lessons. Prepare via standard textbooks and BIS/Banking chapter summaries.

📚 Reading List :
  • Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.20 BASEL Norms > p. 93
🔗 Anchor: "Does the Basel III Accord aim to reduce greenhouse gas emissions and place a hea..."
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🌑 The Hidden Trap

The 'Next Logical Question' targets the specific ratios introduced by Basel III: Liquidity Coverage Ratio (LCR) (resilience for 30 days) vs. Net Stable Funding Ratio (NSFR) (resilience for 1 year). UPSC loves asking the difference between short-term and long-term stability tools.

⚡ Elimination Cheat Code

Use 'City Association Logic'. Basel (Switzerland) is the HQ of the BIS (the Central Bankers' bank). Biodiversity/Climate treaties are usually named after cities like Rio, Nagoya, Cartagena, or Kyoto. If the city is the 'Banker's Hub', the answer must be financial. Eliminate A, C, and D instantly.

🔗 Mains Connection

Mains GS-3 (Economy): Link Basel III to the 'Twin Balance Sheet Problem'. While Basel norms increase stability (prevent bank failures), they lock up capital, potentially reducing credit availability for infrastructure—a classic 'Stability vs. Growth' trade-off for your Mains answers.

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SIMILAR QUESTIONS

IAS · 2007 · Q6 Relevance score: -4.07

Basel II relates to which one of the following?

CDS-I · 2020 · Q94 Relevance score: -4.29

The "Basel Convention' is aimed at protecting human health and environment against the adverse effect of which of the following?

IAS · 2025 · Q34 Relevance score: -5.93

Consider the following statements : Statement I : Article 6 of the Paris Agreement on climate change is frequently discussed in global discussions on sustainable development and climate change. Statement II : Article 6 of the Paris Agreement on climate change sets out the principles of carbon markets. Statement III : Article 6 of the Paris Agreement on climate change intends to promote inter-country non-market strategies to reach their climate targets. Which one of the following is correct in respect of the above statements?

IAS · 2016 · Q6 Relevance score: -5.93

The term Intended Nationally Determined Contributions' is sometimes seen in the news in the context of