BANKS MAY NEED UP TO $50 BN EXTRA EQUITY UNDER BASEL III CAPITAL REGULATIONS: FITCH

Indian banks may need to raise up to $50 billion of additional equity under the Basel III capital regulations announced by the Reserve Bank of India, Fitch Ratings said on Friday.

More than three-quarters of this extra funding would need to be added between the fiscal years 2015/16 and 2017/18, the ratings agency said in a statement.

Lenders have to maintain Tier I capital, or core capital, of at least 7 percent of their risk weighted assets on an ongoing basis, the RBI said in its final guidelines on Basel III capital regulations on Wednesday, from 6 percent currently.

The guidelines are effective from Jan. 1, 2013 in a phased manner over five years.

The new regulations could lead to an equity dilution in banks of roughly $30 billion to $35 billion over the next five years, Macquarie said.

SOURCE: http://economictimes.indiatimes.com/news/news-by-industry/banking/finance/banking/banks-may-need-up-to-50-bn-extra-equity-under-basel-iii-capital-regulations-fitch/articleshow/12993648.cms