Banks may face capital crunch of $50 billion if NBFC crisis drags: Fitch

The agency said it also pictured a scenario where 30 per cent of banks' property exposure becomes non-performing, due to tight liquidity and weak sales

Rating agency Fitch Ratings on Tuesday said Indian banks might face a capital shortfall of $50 billion in the event of a systemic crisis in the non-banking financial company (NBFC) sector.

The stress test conducted on the banking entities show that the credit profiles of state banks would come under significant pressure. The weakest, including those with viability ratings in the ‘b’ range, would face heightened solvency risks without capital injections from the government, the agency said.

The sector is already $7 billion short of the capital required to meet a 10 per cent weighted-average common equity tier-1 (CET1) ratio, the level