Mid-sized lender Union Bank of India plans to raise Rs 3,000 crore towards equity to meet Basel-III norms after 2015. Though it may not need any fresh equity until 2015, the bank has given a proposal to the Ministry of Finance for the additional capital and it is currently being studied, Union Bank Chairman and Managing Director D Sarkar said. The government roughly holds 58 per cent in the bank as on June 30, 2013.
During his recent visit to Hyderabad Sarkar said that till 2015, with the present growth we may not require any additional capital as per Basel-3. After that we have to increase the capital. We may need additional Rs 3,000 crore to meet the Basel requirement. In accordance with Basel III norms, Indian banks will have to maintain their capital adequacy ratio at 9 per cent as against the minimum recommended requirement of 8 per cent.
Under Basel-III accord, banks have to maintain Tier-one capital (equity and reserves) at 7 per cent of risk weighted assets (RWA) and a capital conservation bugger of 2.5 per cent of RWA. Last year, we received Rs 1,140 crore capital infusion from the government. We gave proposal to infuse nearly Rs 1,800 crore in this year,” the banker said.
Leave a Reply
You must be logged in to post a comment.