Reserve Bank of India has set a deadline of March 2018 for Indian banks to complete their conformation to the Basel-III norms. Bank has also said that Indian banks will have to raise an additional capital of Rs. 1.6 trillion to Rs. 1.75 trillion to conform the Basel-III capital adequacy norms. RBI Governor D. Subbarao said while speaking on risk management at the Centre for Economic and Social Studies here.
The reforms are aimed at propping up the banking sector's ability to absorb shocks arising from financial and economic stress and improve risk management.
On the occasion, Rao said, "Our own estimate show that after accounting for whatever banks will generate by way of internal accruals and interest earnings, the banks should raise an additional capital of 1.6 to 1.75 trillion Rupees."
It is noted that developed by the Basel Committee on Banking Supervision, Basel-III is a set of reform measures to consolidate the regulation, supervision and risk management of the banking sector.
He stated that due to fiscal deficit it would be difficult for the government to infuse the additional capital. There will alternatives before the government either to reduce shareholding to 50 percent or change public sector banking or restrict its expansion.
"The manufacturing sector is more credit-intensive. We need to be focusing on manufacturing because you cannot accelerate from current level of 6.5 percent to 7,8,9 and even 10 percent without a focus on manufacturing. You can not provide jobs to hundreds of millions of people who are going to be released by agriculture sector in the other sectors unless you focus on manufacturing," he said.
(With inputs from IANS)
|
|
Comments:
