'Banks may raise Rs 180-200bn for Basel-II norms'

Credit rating agency Icra said that Indian banks, notably state-owned entities, will have to raise Rs 12,000 crore more capital for meeting operational risks alone.

"Indian banks would need additional capital to the extent of about Rs 12,000 crore to meet the capital charge requirement for operational risk under Basel II norms," ICRA said in a report 'Basel II Accord: Impact On Indian Banks'.

However, the banks may raise Rs 18,000-20,000 crore in the medium term when they implement Basel II capital norms from March 31, 2007, it said, adding, PSU banks are likely to raise about Rs 9,000 crore followed by new generation private banks (about Rs 1,100 crore) and old generation private bank (about Rs 750 crore).

"Given the asset growth witnessed in the past and the expected growth trends, the capital charge requirement for operational risk would grow 15-20% annually over the next three years, which implies that banks would need to raise Rs 18,000-20,000 over the medium term," Icra said.

Though the implemenation of globally stringent Basel II accord may not have any significant impact on the credit risk capital allocation, ICRA said there could be a drag on the operational risk capital allocation even as banks could benefit from risk management.