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RBI may raise new banks' minimum capital need to 1000 cr

Low capital would put the newly licensed bank to take high risk and reward route,

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The Reserve Bank of India may increase the minimum capital requirement for new banks to Rs 1,000 crore from the currently proposed Rs 500 crore, said a senior official with direct knowledge of the development.

In its draft guidelines in August, the had proposed a minimum capital requirement of Rs 500 crore for any entity applying for a new bank license.

Earlier this week, the RBI had received comments from industry seeking an increase in the limit.

"Low capital base may not bear the systemic shocks. Low capital would put the newly licensed bank to take high risk and reward route, instead of building a balanced portfolio," the official told Reuters.

 

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