Indian PSBs face fresh capital shortages as coronavirus bites: Moody's

Uncertainty surrounding India's economic recovery and the ongoing clean-up of balance sheets are making it difficult for banks to raise equity capital from markets, it says

With already weak capital buffers, public sector banks in India will need external capital injection of Rs 1.9-2.1 trillion over next two years to restore loss absorption capacity, according to Moody’s.
 

The most likely source of capital to plug these capital shortfalls is the government, despite its completion of a large recapitalisation just a few months ago.
 

Uncertainty surrounding India's economic recovery and the ongoing clean-up of balance sheets are making it difficult for banks to raise equity capital from markets, rating agency said in a statement.