The Union Finance Minister, Mr Pranab Mukherjee, reassured on Saturday that adequate capital would be infused for the regulatory requirements of public sector banks.
Speaking at the 106th foundation day celebrations of Canara Bank, he pointed out that the Centre had allocated Rs 6,000 crore towards capitalisation of public sector banks in this year's Union Budget.
Regulatory requirement
Mr Mukherjee said the Government would ensure that public sector banks meet both the regulatory requirement of eight per cent Tier I capital and the Basel III norms.
Basel III norms prescribe a minimum regulatory capital of 10.5 per cent for banks by January 1, 2019. This includes a minimum of six per cent Tier I capital, plus a minimum of two per cent Tier II capital, and a 2.5 per cent capital conservation buffer. For this buffer, banks are expected set aside profits made during good times so that it can be drawn upon during periods of stress.
Commenting on economic growth, he said there was no need for despondency on this front as domestic consumption would ensure higher growth.