The Reserve Bank of India will soon initiate discussions with Indian banking entities to introduce Basel-II accord, prudential norms including risk management and capital adequacy guidelines, for smooth transition to the new regulatory framework.

"The apex bank would soon hold consultations with bankers to have a better understanding of the new accord, costs and benefits of different approaches and preparation required for transition to new framework, RBI executive director Shyamala Gopinath said addressing a seminar organised by Indian Banks' Association, in Mumbai on Monday.

The central bank would look at a variety of approaches to implement Basel-II framework in a manner suitable to banks in the Indian regulatory environment, she said.

The new framework was necessary due to the advancement in technology and innovations in the banking product and banks would have to develop improved management techniques to effectively deal with operational and credit risks, she said.

Basel-II accord links the capital and risk management, she said, adding banks with advanced risk management techniques may be required to allocate less capital to deal with operational risks.

RBI would fine-tune the supervisory style to reflect risk profile of the individual bank, she said.