New RBI norms to help banks unlock Rs. 40,000 cr – Feedback

The Reserve Bank of India on Tuesday relaxed norms relating to the treatment of certain balance-sheet items, including property, which will help banks unlock capital aggregating about Rs.40,000 crore.

This capital relief comes at a time when the banks, especially those in the public sector, are struggling with bad loans, provisioning requirements and falling equity market valuations. The revised norms will give PSBs access to additional capital of Rs. 35,000 crore, while it could be about Rs.5,000 crore for private sector banks. The unlocking of capital follows a review carried by the RBI with the aim of further aligning the definition of regulatory capital with the globally adopted Basel III norms. These standards aim to improve the banking sector’s ability to absorb shocks arising from financial stress and improve risk management and governance.

http://www.thehindubusinessline.com/todays-paper/new-rbi-norms-to-help-banks-unlock-rs-40000-cr/article8301472.ece

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