 "The IBA wanted the government to invest and control the ARC to give some level of comfort to the lenders because the present ARC mechanism in the market hasn’t shown expected results.")
The plans of state-owned banks to raise capital from private sources will not be sufficient to mitigate anticipated risks unless supplemented with more capital support from the government, Fitch Ratings said on Monday.
Several large state banks have recently announced plans to raise a total of $6 billion in fresh equity from the capital market.
Fitch said state banks already face significant execution risks in raising equity due to depressed stock market valuations and weak investor interest.
"Indian state-owned banks' plans to raise capital from private sources will not be sufficient to mitigate anticipated risks unless supplemented with additional capital
