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FM proposes setting up of autonomous banks board bureau

Says this will be a step towards establishing a holding and investment company for banks

Press Trust of India  |  New Delhi 

Arun Jaitley
FM Arun Jaitley entering the parliament to present Budget 2015 (Pics by Sanjay Sharma)

In order to improve governance of public sector banks, Finance Minister today proposed setting up autonomous board bureau for helping lenders raise capital for meeting expansion needs.

"The Bureau will search and select heads of public sector and help them in developing differentiated strategies of capital raising plans to innovative financial methods and instruments," he said while presenting for 2015-16 in the Lok Sabha.
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This would be a step towards establishing a holding and investment company for banks, he said.

This issue was discussed extensively at the Gyan Sangam addressed by Prime Minister last month.

During the two-day bankers' retreat, heads of financial institutions have suggested the creation of Bank Investment Committee (BIC) and transfer of the government's investment in to BIC.

Creation of BIC would over time enable the government to reduce ownership to below 51% and help generate capital for growth.

In December, the government decided to permit public sector to raise up to Rs 160,000 crore from capital markets by diluting government holding to 52% in phases so as to meet Basel III capital adequacy norms.

Public sector alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.

First Published: Sat, February 28 2015. 13:14 IST
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