State-run banks will need Rs 35,000-40,000 crore of additional capital: S&P

Government-owned banks in India, in aggregate, will be able to absorb the estimated credit losses without breaching the regulatory minimum, but these banks need capital to grow

Global rating agency Standard and Poors (S&P) on Wednesday said that public sector banks in India would need additional capital of Rs 35,000-40,000 crore in the current financial year and barring the State Bank of India and a few large PSBs, most will need capital infusion from the government and government-owned enterprises due to low market valuation.

The large capital raising exercise across Indian financial institutions -- private banks, PSBs and finance companies -- support the system's stability during these rocky times. The investors and stakeholders believe that capital raising is necessary for bolstering the resilience of institutions and instilling