May 28 2014 : The Economic Times (Mumbai) Basel III:Banks may Raise Rs 3 Trillion in Non-core Capital by FY17 Rating agency ICRA on Tuesday said banks would have to mop up ` `3 . 3 trillion (. lakh crore) in non-equity debt over the next three years as they migrate to the capital intensive Basel-III framework. “Banks both public and private sector ones, are expected to issue non-equity capital bonds of ` . 2.5-3 trillion over the next three years till FY17,“ it said in a statement. State-run banks would account for over two-thirds of these bond issuances while private banks would account for the rest, it said. Around 40% of this amount would be in tier-II capital bond, while the remaining 60% would be in additional tier-I capital bonds, it said. However, the agency was a bit pessimistic about additional tier-I bonds, saying that it feared low investor appetite since the newly introduced instrument is riskier. “Additional tier-I investors could incur a loss on the coupon if the common equity falls below 8%, and even the principal could be at risk if common equity tier-I drops below 5.5%,” it said.
Posted on: Wed, 28 May 2014 11:19:03 +0000
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