Banks should jointly decide on timing of capital raising: RBI deputy governor

Says Sebi working on reporting platform for debt securitisation

Banks should consult each other and jointly decide on the timing to raise fresh capital from the market, Reserve Bank of India Deputy Governor R Gandhi said on Tuesday.

"What we are telling banks (is) that simultaneously all of them should not be coming together (to raise capital). There will be a problem," Gandhi said on the sidelines of an industry event.

He said lenders should space out fresh capital raising from the market to avoid a liquidity crunch.

Gandhi said banks can come up with additional requirements, fresh offerings, can raise tier-II capital or resize their balance sheets.

Ratings agency Fitch estimates Indian lenders need more than $200 billion in fresh capital to prepare for the full implementation of the new Basel requirements in the next four years.

On fresh capital infusion in public sector banks and whether it will be adequate, he said that every additional capital investment is always welcome. 

"What we are suggesting, that well in advance if banks are able to shore up ‎their capital it should be good for their sound management," Gandhi added.

He added that market regulator Sebi is working on a platform for reporting securitisation deals.

Gandhi, speaking at an industry conference in Mumbai, said banks' drive to securitise priority sector loans will revive the segment. Small finance banks are also expected to securitise their lendings to diversify balance sheets, he added.