Capital Requirements for Indian Banks: An Empirical Analysis
Rastogi, Anupam B.; Rao, Vivek | November 2014
Abstract
"The paper analyzes the capital requirements for Indian banks on its exposure to the infrastructure sector’s estimated $1 trillion investment requirement from 2013–2018 with 50% programmed to come from the private sector. Current bank exposure to infrastructure is around 17% of total assets which makes meeting this requirement a challenge. The paper also addresses the implications to Indian banks of this proposed expansion in infrastructure lending given the constrained from the implementation of Basel III requirements we well as the emerging risks due to the slowdown of GDP growth and currency depreciation. The study is divided into two parts, (i) developing a macroeconometric model that forecasts bank credit and deposits over 2013–2018 which feeds into a financial model, and (ii) analyzing the implications on bank balance sheets and the challenges in meeting infrastructure financing requirements. The results point to the need for significant capital infusion, at least in public sector banks."
Citation
Rastogi, Anupam B.; Rao, Vivek. 2014. Capital Requirements for Indian Banks: An Empirical Analysis. © Asian Development Bank. http://hdl.handle.net/11540/2265. License: CC BY 3.0 IGO.ISSN
2313-5867 (Print), 2313-5875 (e-ISSN)
Keywords
Economic Development
Economic Infrastructure
Economic Policies
Regional Economic Development
Microfinance Programs
Public Finance
Local Financing
Financial Stability
Financial Sector Regulation
Enterprises
Financial aid
Economies in transition
Local Finance
Local Government
Insurance Companies
Banks
Social Equity
Social responsibility of business
Accounting
Personal budgets
Cost and standard of living
Bank accounts
Credit control
Regulatory reform
Banks and banking
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