{"id":8999,"date":"2020-07-24T21:56:00","date_gmt":"2020-07-24T21:56:00","guid":{"rendered":"https:\/\/bengalnewstimes.com\/?p=8999"},"modified":"2020-07-24T21:56:00","modified_gmt":"2020-07-24T21:56:00","slug":"banks-capital-adequacy-ratio-may-fall-to-13-3-in-a-baseline-scenario-rbi-report","status":"publish","type":"post","link":"https:\/\/bengalnewstimes.com\/?p=8999","title":{"rendered":"Banks&#8217; capital adequacy ratio may fall to 13.3% in a baseline scenario: RBI report"},"content":{"rendered":"<p><\/p>\n<div>\n<div class=\"article-image\">\n<figure><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden wp-image-2018012 size-large\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/07\/1-240-620x413.jpg\" alt=\"\" width=\"620\" height=\"413\" srcset=\"\" sizes=\"auto, (max-width: 620px) 100vw, 620px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"lazy lazy-hidden wp-image-2018012 size-large\" data-lazy-type=\"image\" src=\"https:\/\/images.financialexpress.com\/2020\/07\/1-240-620x413.jpg\" alt=\"\" width=\"620\" height=\"413\" srcset=\"\" sizes=\"auto, (max-width: 620px) 100vw, 620px\"\/><noscript><img loading=\"lazy\" decoding=\"async\" class=\"wp-image-2018012 size-large\" src=\"https:\/\/images.financialexpress.com\/2020\/07\/1-240-620x413.jpg\" alt=\"\" width=\"620\" height=\"413\" srcset=\"https:\/\/images.financialexpress.com\/2020\/07\/1-240-620x413.jpg 620w, https:\/\/images.financialexpress.com\/2020\/07\/1-240-300x200.jpg 300w, https:\/\/images.financialexpress.com\/2020\/07\/1-240-401x267.jpg 401w, https:\/\/images.financialexpress.com\/2020\/07\/1-240-440x293.jpg 440w, https:\/\/images.financialexpress.com\/2020\/07\/1-240-80x54.jpg 80w, https:\/\/images.financialexpress.com\/2020\/07\/1-240-313x209.jpg 313w, https:\/\/images.financialexpress.com\/2020\/07\/1-240.jpg 660w\" sizes=\"auto, (max-width: 620px) 100vw, 620px\"\/><\/noscript><\/noscript><span class=\"article-caption\">Under the baseline scenario, three banks may have capital adequacy ratio under 9% by March 2021. (Reuters image)<\/span><\/figure>\n<\/div>\n<p>The capital adequacy ratio of banks may fall 133 basis points (bps) to 13.3% by March 2021, in comparison to March 2020,\u00a0 under a baseline stress test scenario, according to the financial stability report (FSR) by the Reserve Bank of India (<a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/tag\/rbi\/\" rel=\"noopener noreferrer\">RBI<\/a>).<\/p>\n<p>Under the very severe stress scenario, the capital adequacy ratio of banks may fall to 11.8%, it said. This ratio had already come down 20 bps from 15% in September 2019. Many banks had announced plan to raise capital, in a bid to provide themselves cushion from Covid-19 pandemic.<\/p>\n<p>Under the baseline scenario, three banks may have capital adequacy ratio under 9% by March 2021. The report said five banks may fail to meet the minimum capital level in a very severe stress scenario. \u201cHowever, it does not take into account the mergers or any further recapitalisation, which will further increase systemic resilience,\u201d said the report.<\/p>\n<p>An analysis of the impact of a fall in equity prices on bank capital and profits indicates that the system-level capital adequacy would decline by 57 bps in the baseline under a 55%\u00a0 drop in equity prices.<\/p>\n<p>\u201cThe impact of a drop in equity prices for the overall system is limited as banks typically have a low proportion of capital market exposures on their balance sheets due to regulatory limits,\u201d the report said.<\/p>\n<p>Many public and private banks announced to raise funds last month to maintain healthy capital ratios.\u00a0 <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">State Bank of India<\/a> (<a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/state-bank-of-india-stock-price\/\" rel=\"noopener noreferrer\">SBI<\/a>) chairman Rajnish Kumar declared that lender endeavors to maintain capital adequacy ratio of above 13.1% after October 1. \u201cWe will be endeavoring to maintain capital adequacy ratio 1% above regulatory requirement of 12.1% from October 1,2020\u201d Kumar said. The capital adequacy ratio of SBI stood at 13.06% till March,2020. The bank took shareholders\u2019 approval at its AGM for an enabling resolution to raise Rs 20,000 crore.<\/p>\n<p>Similarly, second-largest public sector lender <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/punjab-national-bank-stock-price\/\" rel=\"noopener noreferrer\">Punjab National Bank<\/a> plans to raise Rs 10,000-crore capital. Private lender <a target=\"_blank\" href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/icici-bank-ltd-stock-price\/\" rel=\"noopener noreferrer\">ICICI Bank<\/a> has also announced to raise Rs 15,000 crore through share sale.<\/p>\n<div class=\"common-bottom-text\">\n<p>Get live <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/\" target=\"_blank\" rel=\"noopener noreferrer\">Stock Prices<\/a> from <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/s-p-bse-sensex-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">BSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nifty-50-stock-price\/\" target=\"_blank\" rel=\"noopener noreferrer\">NSE<\/a>, <a href=\"https:\/\/www.financialexpress.com\/investing-abroad\/\" target=\"_blank\" rel=\"noopener noreferrer\">US Market<\/a> and latest NAV, portfolio of <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/\" target=\"_blank\" rel=\"noopener noreferrer\">Mutual Funds<\/a>, calculate your tax by <a href=\"https:\/\/www.financialexpress.com\/income-tax-calculator\/\" target=\"_blank\" rel=\"noopener noreferrer\">Income Tax Calculator<\/a>, know market\u2019s <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-gainers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Gainers<\/a>, <a href=\"https:\/\/www.financialexpress.com\/market\/stock-market\/nse-top-losers\/\" target=\"_blank\" rel=\"noopener noreferrer\">Top Losers<\/a> &amp; <a href=\"https:\/\/www.financialexpress.com\/mutual-funds-india\/equity-funds\/\" target=\"_blank\" rel=\"noopener noreferrer\">Best Equity Funds<\/a>. Like us on <a href=\"https:\/\/www.facebook.com\/thefinancialexpress\" target=\"_blank\" rel=\"noopener noreferrer\">Facebook<\/a> and follow us on <a href=\"https:\/\/twitter.com\/FinancialXpress\" target=\"_blank\" rel=\"noopener noreferrer\">Twitter<\/a>.<\/p>\n<p class=\"telegram-text\"><img loading=\"lazy\" decoding=\"async\" class=\"telegrma_img\" src=\"https:\/\/images.financialexpress.com\/2020\/04\/telegram.png\" alt=\"\" width=\"24\" height=\"24\" style=\"margin: 0px 5px 4px 0px; float: left;\"\/>Financial Express is now on Telegram. <a href=\"https:\/\/t.me\/TheFinancialExpressOnline\" target=\"_blank\" rel=\"noopener noreferrer\">Click here to join our channel<\/a> and stay updated with the latest Biz news and updates.<\/p>\n<\/div>\n<\/div>\n<p><script async src=\"\/\/platform.twitter.com\/widgets.js\" charset=\"utf-8\"><\/script><br \/>\n<br \/><a href=\\\"https:\/\/www.financialexpress.com\/industry\/banking-finance\/banks-capital-adequacy-ratio-may-fall-to-13-3-in-a-baseline-scenario-rbi-report\/2034343\/\\\">Source link <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Under the baseline scenario, three banks may have capital adequacy ratio under 9% by March 2021. (Reuters image) The capital adequacy ratio of banks may fall 133 basis points (bps) to 13.3% by March 2021, in comparison to March 2020,\u00a0 under a baseline stress test scenario, according to the financial [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":7653,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"spay_email":"","footnotes":""},"categories":[36],"tags":[],"class_list":["post-8999","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-banking-business"],"jetpack_featured_media_url":"https:\/\/bengalnewstimes.com\/wp-content\/uploads\/2020\/07\/1-240.jpg","_links":{"self":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/8999","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=8999"}],"version-history":[{"count":0,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/posts\/8999\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=\/wp\/v2\/media\/7653"}],"wp:attachment":[{"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=8999"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=8999"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bengalnewstimes.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=8999"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}