July 14, 2015 / 6:33 AM / 2 years ago

Banks should jointly decide on timing of capital raising - RBI deputy

A cashier counts Indian rupee currency notes inside a bank in Mumbai December 6, 2013.Danish Siddiqui/Files

MUMBAI (Reuters) - Indian banks should consult each other and jointly decide on the timing to raise fresh capital from the market, Reserve Bank of India Deputy Governor R. Gandhi said on Tuesday.

"What we are telling banks (is) that simultaneously all of them should not be coming together (to raise capital). There will be a problem," Gandhi said on the sidelines of an industry event.

He said lenders should space out fresh capital raising from the market to avoid a liquidity crunch.

Ratings agency Fitch estimates Indian lenders need more than $200 billion in fresh capital to prepare for the full implementation of the new Basel requirements in the next four years.

"What we are suggesting, that well in advance if banks are able to shore up ‎their capital it should be good for their sound management," Gandhi added.

Reporting by Suvashree Dey Choudhury

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