Pillar 3 refers to the third component of the Basel III framework, which focuses on market discipline through enhanced transparency. It requires banks to disclose more detailed information about their risk profiles, capital adequacy, and risk management practices. This increased transparency aims to help investors and stakeholders make informed decisions. By promoting greater accountability, Pillar 3 encourages banks to maintain sound practices and manage risks effectively. The goal is to strengthen the overall stability of the financial system, ensuring that banks operate in a manner that is both responsible and sustainable for the economy.