Indian banks to require more capital as safeguard against stress: Fitch

Business World | Aug 1, 2020 at 6:49 PM
  • Indian state-owned banks’ plans to raise capital from private sources will not be sufficient to mitigate anticipated risks unless supplemented with additional capital support from the government.
  • Fitch expects state banks will remain reliant on fresh equity injections from the state as the proposed capital amounts, if raised fully, will likely add only around 100 to 150 basis points to state banks’ existing common equity tier 1 (CET 1) ratios.
  • Indian private banks’ recapitalisation requirements are comparatively more modest than their proposed fresh capital raising with ICICI Bank and Axis Bank likely to add around 200 to 245 basis points to their existing CET 1 ratios.