Need Rs 14,000 cr for Basel III: Central Bank
Columnist Sanjeev Bhasin takes a look at the factors that influenced market movement in the week gone by, and what one should expect in the coming week.
State-run Central Bank of India has said it will be requiring over Rs 14,000 crore of fresh capital to meet the Basel III guidelines, which will kick in from the next fiscal year.
"Our bank will require Rs 14,067 crore by March 2018 in order to meet the Basel III requirements," chairman and managing director M.V. Tanksale said.
When asked how the bank, which posted a net loss of Rs 105 crore for the March quarter due to a jump in stressed assets, will fund it, Tanksale said it will depend a lot on the proposed follow-on public offer (FPO).
As of March 31, the government had a 79.15 per cent stake in the bank. An FPO will require the government to participate equally in the offering.
According to the research by Care Rating, the banks require up to $55 billion in fresh equity capital to meet the Basel III norms.
The agency said private banks are better placed than the state-run ones when it comes to capital adequacy. Public sector banks will be required to raise up to $20 billion from the capital markets, it predicted.