News APP

NewsApp (Free)

Read news as it happens
Download NewsApp

Available on  gplay

This article was first published 10 years ago
Home  » Business » Basel III deferral to ease pressure on banks: India Ratings

Basel III deferral to ease pressure on banks: India Ratings

Source: PTI
March 28, 2014 15:38 IST
Get Rediff News in your Inbox:

RupeeThursday's announcement of deferral of Basel III norms till March 2019 by the Reserve Bank of India would ease pressure on the banks, ratings agency India Ratings (formerly Fitch) said.

The ratings agency, in a report, said ‘the Reserve Bank of India’s deferral of the Basel 3 implementation deadline by a year has eased the pressure on banks to issue hybrid Tier 1 capital in FY15.’

The report said that this was a practical outcome of the current limited investor appetite for such instruments and the agency believes that the new deadlines do not dilute the

spirit of Basel III.

However, capital injection will remain a priority for Indian banks through the rest of this decade, as the total capital required during the migration to Basel III will only go up due to the extra year added during the transition till March 2019, the report said.

The government’s commitment to maintain its majority shareholding in public sector banks assures them of steady equity injections, the agency stated.

The earlier guideline required banks to issue as much as Rs 26,000 crore of hybrid Tier I capital in FY15, significantly more than the Rs 11,200 crore (Rs 112 billion) of common equity Tier I that the government has budgeted to inject during the year.

Get Rediff News in your Inbox:
Source: PTI© Copyright 2024 PTI. All rights reserved. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.
 

Moneywiz Live!