PSBs need four times more capital than govt allocation: Moody's

Lower market valuations was biggest hindrance if PSBs chose to raise fresh equity from markets

With ailing public sector banks (PSBs) finding it tough to raise capital from the market, the government may have to raise equity infusion by almost four-five times over two years, Moody’s Investors Service has said. Thus, the Centre may have to chip in with up to Rs 95,000 crore in FY18 and FY19, up from its initial commitment of Rs 20,000 crore, the rating agency said on Thursday.

PSBs require external capital of about Rs 70,000-95,000 crore to meet the Basel-III capital adequacy norms by March 2019. Though the PSBs have announced plans to raise external capital (equity and additional