SFBs need Rs 4,000 cr capital to maintain 30% CAGR in advances: CareEdge

Capital raising delayed amid volatile markets, lower risk apetite among investors

Small Finance Banks ( SFBs) as a group will need to raise capital to the extent of Rs 4,000 crore in FY23 and FY24 in order to maintain 30 per cent Compound Annual Growth Rate for advances. This factors in a two per cent cushion over minimum regulatory capital requirements, according to rating agency CareEdge Ratings.

With the continuing asset quality challenges faced by the SFBs, they now also face issues in mobilising fresh capital. Many of them have planned Initial Public Offering (IPO) but there has been delay in raising funds.

Post demonetisation, the capital cushion improved with fresh