RBI capital adequacy move opens window for Rs 3-trn extra lending by banks

RBI move to ease norms may reduce govt's capital infusion burden by Rs 350 billion

A Reserve Bank of India (RBI) logo is seen at the gate of its office in New Delhi. Photo: Reuters

With the Reserve Bank of India (RBI) extending the deadline for banks to meet capital adequacy norms, lenders will be able to disburse additional loans in excess of Rs 3 trillion till the end of next financial year, sources aware of the matter said. The government, too, will see a fall in the capital infusion requirement in public sector banks as a consequence of the relaxation in one component of the capital adequacy rules. The saving for the government on this count is expected to be around Rs 350 billion in the current financial year. Besides, the proposed restructuring ...