Amid contradictory ratings by global agencies, the Reserve Bank today said Indian banking sector is not facing any stress, though state-owned lenders need capital infusion.
"Overall, we don't see any fundamental stress on the banking system as a whole. So we are nowhere close to the problem," RBI Deputy Governor Subir Gokarn told reporters on the sidelines of an Assocham event here.
His comments come within days of ratings firm Moody's downgrading the outlook of the Indian banking system to 'negative', from 'stable'. Another rating agency Standard & Poor's, however, upgraded the ranking saying domestic regulations in India are in line with global standards.
"There are of course long term issues of capital. If the system is growing at 20% a year, it needs the capital to grow at 20% at a year... It is not any indication of systemic threat," Gokarn added.
He, however, admitted that there could be some pressure points on the banking system on account of high interest rates.
The capital requirement of PSU banks, including SBI, for the fiscal has been estimated at between Rs 10,000-20,000 crore. The government has already made a provision to infuse Rs 6,000 crore in public sector banks in the current fiscal.
As regards the increase in non-performing assets (NPAs) of the banking sector, he said, "NPAs are increasing, but it is not dramatic".
NPAs of state-owned banks have increased to 2.31% of their assets at the end of March 2011, from 2.27% in the year-ago period.
As at the end of September quarter, the gross NPAs of country's largest lender SBI stood at 4.19%, higher than 3.38% in the year-ago period.
