‘Govt banks need ₹2.5 lakh crore in 3 years’

MUMBAI: Standard & Poor’s Global Ratings on Tuesday said that Indian state-run banks will need ₹2.5 lakh crore capital infusion over the next three years to meet

MUMBAI: Standard & Poor’s Global Ratings on Tuesday said that Indian state-run banks will need ₹2.5 lakh crore capital infusion over the next three years to meet Basel-III requirements.

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“Banks, which are mired in high levels of stressed assets, cannot raise the money from the markets and will have to depend on the government for the infusion,” agency’s credit analyst Geeta Chugh said. “There are other avenues such as issuing additional Tier-I bonds, which is yet to become popular.”

If the banks fail to raise the required amount of capital, it may lead them to losing market share as they will be unable to fund the new credit demand.

The government had last year announced it will infuse ₹70,000 crore into the state-run banks over four years.