The Reserve Bank of India (RBI) has asked public sector banks to work out a strategy on fund raising and avoid crowding the markets. The Central bank will be looking at the Q1 results of banks to assess the progress on bad loan management.
“What we’re telling the banks is that all of them should not come together. There should be a sequencing of the timing. These are the strategies they can adopt,” RBI deputy governor R Gandhi said.
“Every additional capital investment is always welcome,” he told reporters.
Gandhi said there is a need for banks to shore up their capital in view of the migration to the capital-intensive Basel-III framework over the next four years and added that there are many ways to do so.
He acknowledged that banks are waiting for the right time to hit the markets which will be primarily driven by the pricing targets.He acknowledged that banks are waiting for the right time to hit the markets which will be primarily driven by the pricing targets.
On bad assets, he said there is a need for early reporting and management. The RBI’s Financial Stability Report says stressed assets (NPAs and restructured loans) of PSU banks work out to 13.5 per cent as of March 2015. WITH PTI