Bank’s earnings to come under pressure due to Basel-III norms: Mr Anand Sinha

Earnings of banks are likely to come under pressure due to the higher capital requirements for the implementation of global risk mechanism, Basel III norms, Reserve Bank Deputy Governor Mr Anand Sinha said. He also said the banks would have to increase productivity in order to protect their RoE (Return on Equity).

Basel-III norms, proposed to be implemented from the beginning of 2013 till 2017, require the equity capital of a bank to be not less than 5.5 per cent of risk-weighted loans, as per the draft guidelines issued by the RBI.