Basel-III to put pressure on bank earnings: RBI

Earnings of banks are likely to come under pressure due to the higher capital requirements for the implementation of new global risk mechanism, Basel III norms, Reserve Bank deputy governor Anand Sinha said. “There is going to be pressure on banks’ earnings, not only in India but across the world. That’s why, Basel-III implementation has been made longer, so that there will be least disruption,” he said. “However, if you have to do the same activity with significantly higher capital, there will be pressure on return on equity (RoE),” Sinha told reporters on the sidelines of a workshop on ‘Strengthening Microfinance Institutions’.