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Sunday, May 13, 2012

Central Bank needs Rs 14K cr for Basel III norms

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 next fiscal.

“Our bank will require Rs 14,067 crore in order to meet the Basel-III requirements,” the bank’s chairman and managing director Mr 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, Mr Tanksale said it will depend a lot on the proposed follow-on offer.

As of March 31, the government had a 79.15 percent 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.


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