You are here: Home » Budget » News » Financial Sector
Business Standard

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 Arun Jaitley today proposed setting up autonomous banks board bureau for helping lenders raise capital for meeting expansion needs.

"The Bureau will search and select heads of public sector banks 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..

Read our full coverage on Union Budget

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 Narendra Modi 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 banks to BIC.

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

In December, the government decided to permit public sector banks 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 banks alone require Rs 2.40 lakh crore by 2018 to meet global Basel III norms.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

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