Indian banks to face $65-bn capital shortage by FY19, cautions Fitch

The ratings agency cut its capital requirement estimate to $65 bn from $90 bn

Flagging the negative effect of a weak capital base, ratings agency Fitch on Tuesday said Indian banks might require around $65 billion of additional capital to meet the new Basel-III capital standards by March 2019 (financial year 2018-19).

The ratings agency has reduced its capital requirement estimate to $65 billion from its earlier assessment of $90 billion.

Capital needs have fallen from its previous estimate of $90 billion largely as a result of asset rationalisation and weaker-than-expected loan growth, Fitch said.

Even so, state banks, which account for 95 per cent of the estimated shortage, have limited options to raise