Banks will need Rs 5 lakh cr to meet Basel III norms: RBI

Mumbai, September 4: Indian Banks will need Rs 5 lakh cr to meet Basel III norms – Reserve Bank of India (RBI) Governor D Subbarao said today. The govt alone will  have to pump in Rs 90,000 crore equity to retain its shareholding in the Public Sector Banks (PSB) at the current level to meet the Basel III norms. Currently, Government owns 70% of the Banking System in India. The new norms are to be implemented in a phased manner by banks by March 2018.

Mr. D. Subbarao said “fiscal constraints poses significant challenges” to the government to re-capitalise banks to help them meet the Basel III norms, but bringing down its holdings to below 51% can help tide over the problem.

“Reserve Bank’s estimates project an additional capital requirement of Rs 5 trillion (additional capital required by all banks to meet Basel III norms). If the Government opts to maintain its shareholding at the current level, the burden of recapitalisation (in PSBs) will be of the order of Rs 900 billion,” he said at the FICCI-IBA Banking Conference here.

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