Fitch Ratings has estimated that India’s banks will need about $90 billion to meet global Basel III rules which are due to be fully implemented by March 2019. This is an onerous task for the banks, given their weak asset quality and capability for capital generation internally, Fitch said in a statement. More than half the capital needs will have to be met via core equity, it added.
The sharp rise in their non-performing loans and resultant losses have weakened the banks’ core capital buffers, it said about the public sector banks, adding the viability ratings of the banks would be under pressure if capital levels are not addressed either by the government or the market. The government has plans to inject Rs 45,000 crore ($6.7 billion) in the banks through March 2019.