New Delhi: Finance Minister Arun Jaitley on Thursday asserted that banking needs in the country need to be strengthened. He proposed that Rs 2,40,000 crore need to be infused in the banking sector by 2018 to meet global Basel III norms.
He proposed to provide greater autonomy to public sector banks, "We will also examine the proposal to give greater autonomy to banks while making them accountable. To meet this huge capital requirement, we need to raise additional resources to fill this obligation." A large part of this fund would be raised through public offers made to retail customers, he said.
"While preserving the public ownership, the capital of these banks would be raised by increasing the shareholding of capital in the phased manner through sale of shares largely through retail common citizen in the country," he said.
"Thus, while the government would continue to hold majority shareholding, the citizen of India will also get direct shareholding in the bank which they currently hold indirectly," he added. Besides, he said government would look into the issue of providing greater autonomy to the boards of banks.
He also proposed a number of measures to energise Indian capital market adding that there is an urgent need to converge current Indian standard with international accounting standards.
The interim budget had announced infusion of Rs 11,200 crore in public sector banks to enhance their capital in the current financial year. Presently, there are 27 public sector banks including SBI and its subsidiaries.
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