http://www.thehindubusinessline.com/industry-and-economy/banking/article3871173.ece
The State Bank of India and its associates and subsidiaries will require around Rs 1 lakh crore of capital over the next five years to meet Basel III norms (in addition to retained earnings).
Diwakar Gupta, Managing Director and Chief Financial Officer of SBI, toldBusiness Line this was based on a 20 per cent growth rate, and a return on equity of between 18 and 20 per cent. He conceded that the estimate could vary since growth rates during the last year as well as current year are lower.
The RBI estimates that Indian banks would need about Rs 5 lakh crore in the next five years to get ready for Basel-III norms that will be effective from 2018. The norms, developed in the backdrop of the global crisis in 2008, impose higher capital prescriptions on banks to cater to various risks.
Asked about the capital that the bank would receive from the government in the current year, Gupta said, “The number being bandied about in the press is closer to Rs 4,000 crore. We are reasonably comfortable with capital. Rs 4,000 crore will see that we don’t breach anything.”
SBI received Rs 7,900 crore infusion from the government last fiscal. He said, “We don’t need further capital under Basel III all the way up to 2015. Counter-cyclical buffer introduction may require capital beyond 2015. The extra 2.5 per cent will come up in 4 tranches and the fiscal 2015 may require a little capital.”
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