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The Basle committee on Banking Supervision, with the endorsement of the Central bank Governors of the Group of ten countries in collaboration with Supervisory authorities in fifteen emerging market countries developed a set of twenty-five basic principles for supervisory system to be effective.  The principles are comprehensive and represent the basic elements of an effective supervisory system.  The 25 principles are enumerated below:

Principle1- Objectives, Independence, Powers, Transparency and Cooperation
Principle2 – Permissible Activities
Principle3- Licensing Criteria
Principle4- Transfer of Significant Ownership
Principle5- Major Acquisitions
Principle6- Capital Adequacy
Principle 7- Risk Management Process
Principle8 – Credit Risk
Principle9 – Problem Assets, Provisions and Reserves
Principle10- Large Exposure Limits
Principle11- Exposures to Related Parties
Principle12- Country and Transfer Risks
Principle13- Market Risks
Principle14- Liquidity Risks
Principle15- Operational Risks
Principle16- Interest Rate Risk in the Banking Book
Principle17- Internal Control and Audit
Principle18- Abuse of Financial Services
Principle19- Supervisory Approach
Principle20- Supervisory Techniques
Principle21- Supervisory Reporting
Principle22- Accounting and Disclosure
Principle23- Corrective and Remedial Powers of Supervisors
Principle24- Consolidated Supervision
Principle25- Home-Host Relationships