<h1>Basel III capital reforms bolster bank solvency and liquidity; India tightens standards and expands oversight of shadow banking.</h1> The address sets out India's regulatory responses to crisis lessons: implementation of Basel III consistent with higher domestic capital and liquidity standards and a phased timetable; strengthened oversight of shadow banking via regulation and restriction of deposit taking by NBFCs alongside enhanced surveillance and enforcement; a policy tilt toward subsidiarisation of foreign banks with conversion incentives and pending legal clarifications; incremental OTC derivatives reforms focused on standardisation, reporting, central clearing and guaranteed settlement; and debate over institutional arrangements for macroprudential oversight centered on the role of the Financial Stability and Development Council.