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Banks will need Rs 5 lakh cr for Basel III norms
Indian banks will require an additional capital of Rs 5 lakh crore to meet the new global banking norms, Basel III, RBI Governor D Subbarao said today.
The new norms are to be implemented in a phased manner by banks by March 2018.
The government, which owns 70 per cent of the banking system, alone will have to pump in Rs 90,000 crore equity to retain its shareholding in the Public Sector Banks (PSBs) at the current level to meet the norms.
Subbarao said “fiscal constraints poses significant challenges” to the government to re-capitalise banks to help them meet the Basel III norms, but bringing down its holdings to below 51 per cent can help tide over the problem.
“Reserve Bank’s estimates project an additional capital requirement of Rs 5 trillion (additional capital required by all banks to meet Basel III norms).
“... If the Government opts to maintain its shareholding at the current level, the burden of recapitalisation (in PSBs) will be of the order of Rs 900 billion,” he said at the FICCI-IBA Banking Conference here.Of the total Rs 5 lakh crore (Rs 5 trillion), equity capital will be of the order of Rs 1.75 lakh crore andRs 3.25 lakh crore as non-equity.
Indian banks will require an additional capital of Rs 5 lakh crore to meet the new global banking norms, Basel III, RBI Governor D Subbarao said today.
The new norms are to be implemented in a phased manner by banks by March 2018.
The government, which owns 70 per cent of the banking system, alone will have to pump in Rs 90,000 crore equity to retain its shareholding in the Public Sector Banks (PSBs) at the current level to meet the norms.
Subbarao said “fiscal constraints poses significant challenges” to the government to re-capitalise banks to help them meet the Basel III norms, but bringing down its holdings to below 51 per cent can help tide over the problem.
“Reserve Bank’s estimates project an additional capital requirement of Rs 5 trillion (additional capital required by all banks to meet Basel III norms).
“... If the Government opts to maintain its shareholding at the current level, the burden of recapitalisation (in PSBs) will be of the order of Rs 900 billion,” he said at the FICCI-IBA Banking Conference here.Of the total Rs 5 lakh crore (Rs 5 trillion), equity capital will be of the order of Rs 1.75 lakh crore andRs 3.25 lakh crore as non-equity.
