 "RBI relaxing risk weights to release Rs 40,000 cr capital for banks")
The Reserve Bank of India's decision to relax risk weights for bank exposure to non-banking finance companies (NBFCs) and microfinance institutions (MFIs) is expected to free as much as Rs 40,000 crore capital of the banking system, which would translate into an additional funds of Rs 4 trillion that can be lent. Bandhan Bank could be the biggest beneficiary of this move as it will see 2.5 per cent of its CET-I capital being freed up after this move, followed by IndusInd Bank. Both the banks have relatively high microfinance exposure.
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