Banks in India will need Rs.2.7 trillion by March 2018 to meet Tier-I capital requirements for Basel III.
India’s leading Rating Agency CRISIL estimates that banks in India will need to raise Rs.2.7 trillion by March 2018 to meet Tier-I capital requirements under Basel III. Starting April 2013, Basel III guidelines on capital regulations issued by the Reserve Bank of India (RBI) will be implemented in a phased manner.
The Tier-I capital requirement consists of two components—a minimum of Rs.1.3 trillion as equity capital and up to Rs.1.4 trillion as non-equity Tier-I capital.
CRISIL believes that while India’s banks are comfortably placed to raise the equity capital component, the key challenge lies in raising non-equity Tier-I capital, given that the instruments’ features are riskier than under Basel II.