Hyderabad: Mid-sized lender Union Bank of India plans to raise Rs 3,000 crore towards equity to meet Basel-III norms after 2015.
Though it may not need any fresh equity until 2015, the bank has given a proposal to the Ministry of Finance for the additional capital and it is currently being studied, Union Bank chairman and managing director D Sarkar said.
The government roughly holds 58 percent in the bank as on June 30, 2013.
"Till 2015, with the present growth we may not require any additional capital as per Basel-3. After that we have to increase the capital. We may need additional Rs 3,000 crore to meet the Basel requirement," said Sarkar during his recent visit to Hyderabad.
In accordance with Basel III norms, Indian banks will have to maintain their capital adequacy ratio at 9 percent as against the minimum recommended requirement of 8 percent.
Under Basel-III accord, banks have to maintain Tier-one capital (equity and reserves) at 7 percent of risk weighted assets (RWA) and a capital conservation bugger of 2.5 percent of RWA.
"Last year, we received Rs 1,140 crore capital infusion from the government. We gave proposal to infuse nearly Rs 1,800 crore in this year," the banker said.
A senior official of the public sector lender, on condition of anonymity, said though they may not need the additional capital until 2015, the bank has submitted the proposal to the government for equity infusion in future.
First Published: Sunday, August 4, 2013, 15:16