The Government needs to pump in additional $65 billion capital into PSU banks for effective NPA resolution.
In order to meet the Basel III capital adequacy norms by March 2019, Indian PSU banks need about $65 billion in additional capital, Fitch Ratings said.
The rating agency added that weak capital positions have a major negative influence on the banks’ viability ratings which will come under more pressure if the problem is not addressed, a PTI report said.
“Indian banks are likely to require around $65 billion of additional capital to meet new Basel III capital standards that will be fully implemented by the financial year ending March 2019,” Fitch was quoted as saying.
“Prospects for internal capital generation are weak and low investor confidence impedes access to the equity capital market,” Fitch added.