Indian banks might not meet Basel III

Large bad assets a big hindrance, said Standard & Poor's.

The international ratings agency said Indian banks might find it difficult to raise funds to meet the new norms due to their rising bad assets.

It expects banks in high-growth systems such as India to face challenges in maintaining or raising capital ratios to keep pace with growth in risk assets. It estimated that capital shortfall of major Indian and Chinese banks could reach about US$100 billion by 2019.

The Reserve Bank of India, the central bank, last month rescheduled the starting date for implementation of the Basel III norms to April 2013 from January.

"Asia-Pacific banks are poised to take the global lead in implementing Basel III in 2013,” Standard & Poor's said.

“Most countries in the region have published their final set of Basel III capital reform regulations effective from January 2013 and these banks will adopt the new capital regulations ahead of their global peers."