INDIA: The specter of credit starvation

Source: Live Mint

“Do Indian banks have enough capital to lend in case the elusive economic recovery materializes later this year? The answer seems to be no, especially since minimum total capital requirements are set to rise this financial year. According to the Reserve Bank of India (RBI)’s timeline for implementing Basel III norms, banks have to provide for a capital conservation buffer of 0.625% of risk-weighted assets by the end of this financial year.

Including this, the minimum total capital requirement will increase to 9.625%. In the next financial year, this increases to 10.25%. While the big state-owned banks such as State Bank of India, Bank of Baroda and Punjab National Bank have relatively comfortable capital positions, the situation is dire for mid-cap public sector banks, which account for around one-third of bank credit.”

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The Association of International Wealth Management of India (AIWMI) is a not-for-profit organization and a globally recognized membership association for finance professionals. AIWMI primarily focuses on the broad and strategic role of developing a more robust and forward-looking training infrastructure for the financial services sector and to promote more active industry involvement and collaboration in training and continuing education. AIWMI is offering advanced international certification programs along with a wide variety of high-quality executive education programs. AIWMI programs combine state-of-the-art knowledge and skills with practical experience and insights into the functioning of the financial sector. All AIWMI courses and educational events have an intense and pragmatic curriculum. Participants are exposed to the latest developments within the financial services sector. AIWMI plays a key role in guiding the development of the financial services sector. AIWMI works with key industry participants’ viz. the Government, the Regulators, the Industries/Associations, the Corporate, the Media and the General Public to achieve its objectives. Besides enhancing technical competence and professionalism in the industry, AIWMI organizes events and facilitates discussions to promote best practices in leadership and talent development in the financial sector with an aim to become Asia’s premier center of excellence for financial education.

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