According to global ratings agency Standard & PoorÂ’s, the Indian banking system could face challenges in maintaining or raising capital ratios if Basel-III norms are implemented immediately.
The agency said if the Reserve Bank of India decides to implement Basel-III norms immediately Indian banks could face a $3-4 billion (Rs 16,185-21,600 crore) capital shortfall in maintaining a common equity Tier-I capital ratio of eight per cent.
The total capital shortfall of major banks in China and India, which have high-growth banking systems, could reach about $100 bn in 2019, it has said.
State-run banks could manage the shortfall without cutting risk assets, as the government might infuse money or they could tap the capital market. governmentÂ’s capacity to provide sufficient capital in a timely manner does, however, pose a risk, S&P said.
Leave a Reply
You must be logged in to post a comment.