RBI's New Rules to Help Banks Raise Capital for Basel III: Moody's

The changes in the rules for raising Basel III-compliant capital announced by India's central bank this month are "credit positive" as they make it easier for banks to raise funds and attract more investors, Moody's said on Monday.

The Reserve Bank of India on September 1 cut the minimum maturity for Tier 2 capital that banks can issue to five years from 10 years. It also allowed retail investors to buy Tier 1 capital.

"The new norms are credit positive for Indian banks, in particular public-sector banks," Moody's Investors Service said in its weekly credit outlook out on Monday.

Indian banks have to comply with Basel III capital norms by March 2019, including maintaining a minimum capital adequacy ratio of 11.5 per cent.

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