Indian Banks will require about $65 billion in additional capital, lower than estimated earlier, to meet the Basel III capital adequacy norms by March 2019 and push loan growth, Fitch Ratings said on Tuesday.

Weak capital positions have a major negative influence on the banks’ viability ratings which will come under more pressure if the problem is not addressed, it added.

“Indian banks are likely to require around $65 billion of additional capital to meet new Basel III capital standards that will be fully implemented by the financial year ending March 2019,” Fitch said.

This is lower than the US-based credit rating agency’s previous estimate of $90 billion, largely as a result of asset rationalisation and weaker-than-expected loan growth.

State-owned banks - which account for 95% of the estimated shortage - have limited options to raise the capital they still require, it said.

“Prospects for internal capital generation are weak and low investor confidence impedes access to the equity capital market,” Fitch said, adding that they are likely to be dependent on the state to meet core capital requirements.

The government is committed to investing only another $3 billion in fresh equity for 21 public sector banks (PSBs) over the current and the next fiscal, having already provided most of the originally budgeted $11 billion.

“Fitch believes the government will have to pump in more than double, even on a bare minimum basis, if it is to raise loan growth, address weak provision cover, and aid in effective NPL resolution,” it said.

The gross non-performing loan (NPL) ratio reached 9.7% in 2016-17, up from 7.8% in 2015-16.

The NPL resolution process being led by the Reserve Bank could potentially release capital if recovery rates are as high as banks and the government are hoping for.

There are 12 currently going through resolution, representing 25% of total system NPLs, and the RBI has recently released a list of 50 more accounts that banks have been directed to resolve within three months or push into the insolvency process.

“State banks are unlikely to be freed from their current gridlock unless NPL resolution is accompanied by additional capital,” Fitch said.

Three days after the ghastly murder of a seven-year-old student in Ryan International School, Gurugram, the events surrounding the death are still unclear.

A Class 2 student of the school, Pradyuman Thakur was found murdered in the school toilet on Friday, September  8, early morning.

The alleged culprits

According to reports, Ashok Kumar, a 42-year-old bus conductor, has been arrested after confessing to slitting the throat of the student who he allegedly tried to sexually abuse inside the toilet.

Two top officials of the school have been arrested, while the acting principal has been detained and remanded to two-day police custody for questioning.
Negligence and cover-up?

Now, the bus driver, who was with the accused minutes before the crime has made some revelations which hint at a cover-up on part of the school authorities and the police.

The driver, Sourav Raghav, said he was pressured by the police and the Ryan school management to stick to their version of events, reported News18.
Authorities have claimed that the conductor managed to bring the murder weapon, the knife, into the school premises undetected because it was part of the tool kit.

However, the driver said that the knife was not part of the tool kit and police threatened to make him admit it was. “I keep opening the tool box and had inspected it on that day as well. The knife was not there,” he said.

Pradyuman murder case: Haryana cops tell court that Ryan International School in Gurugram tampered with evidence #SaveOurKids pic.twitter.com/8MFMzvdHf3

— TIMES NOW (@TimesNow) 11 September 2017

Moreover, Raghav told India Today that he saw the conductor in a blood soaked shirt. Raghav said the conductor told him that school authorities asked him to carry injured Pradyuman to a car.

He revealed that the school authorities and the accused conductor Ashok told him that the kid fell in the washroom and hurt himself. He also added that the accused conductor was repeatedly advised on several occasions not to use the kids' washroom, but didn't pay heed.

Fallout

Probing the case, the SIT probing the case has revealed serious lapses on part of the school authorities to provide safety and security to its students, such as broken boundary wall, lacked separate toilet for students, drivers and others and even CCTV installed in the schools were found to be faulty.

Anxious parents have been protesting across Ryan branches in Delhi-NCR and in Mumbai, seeking assurance of the safety of their children and demanding a CBI probe into the murder.

On Monday, SHO of Sadar Police Station on Sohna Road in Gurugram was suspended in connection with the baton-charge on protesting parents and journalists.

Meanwhile, the victim's father has moved the Supreme Court, seeking a CBI probe into the case. He has also blamed the school authorities of tampering with evidence and failing to provide safety.

“The school management is responsible for negligence in providing safety and security to the students,” he said.