You are here: Home » Reuters » News
Business Standard

Indian banks need $65 billion capital to meet Basel rules by March 2019 - Fitch

Reuters  |  MUMBAI 

(Reuters) - Indian will need additional capital of $65 billion to meet all of global III rules by March 2019, with state-run lenders accounting for 95 percent of the requirements, Ratings said on Tuesday.

That is far above the $11 billion in capital infusions into state-run lenders the government has budgeted through March 2019, with $3 billion due to be injected in the 2017/18 and 2018/19 fiscal years.

Fitch's latest estimate is lower than its previous call of $90 billion as weaker-than-expected loan growth reduced capital requirements, but the credit rating agency continued to warn that Indian lenders "have limited options to raise the capital they still require".

Stressed loans in Indian hit a record $150 billion at the end of December, with state-run lenders accounting for the bulk of it.

"State are unlikely to be freed from their current gridlock unless NPL (non-performing loan) resolution is accompanied by additional capital," said in its statement.

It added the capital requirements at Indian state-run lenders remained hefty due to several factors, including low common equity ratios and provisioning requirements for new loans.

($1 = 64.0100 Indian rupees)

(Reporting by Suvashree Dey Choudhury and Devidutta Tripathy; Editing by Jacqueline Wong)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Tue, September 12 2017. 11:40 IST
RECOMMENDED FOR YOU