Banks to get capital to fight global woes: Pranab

Pranab Mukherjee addressing at the inauguration of the Corporate Office of Oriental Bank of Commerce, at Gurgaon, Haryana on Sunday.

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SME Times News Bureau | 20 Feb, 2012
The Indian government will provide adequate capital to all the public sector banks to help them face risks arising out the global economic uncertainties, Finance Minister Pranab Mukherjee said Sunday.

"Government is taking necessary steps to keep all the PSBs adequately capitalised. I can assure you that we are committed to bringing our banks at par with their global peers while catering to the needs of our economy," Mukherjee said after inaugurating the new corporate office of Oriental Bank of Commerce in Gurgaon.

The finance minister said the government was committed to maintain a minimum of 8 percent Tier-I capital (equity capital) in all public sector banks (PSBs), which is over and above the regulatory requirement of 6 percent.

He said the Basel III capital regulations would be implemented from the beginning of next year.

The draft guidelines on Basel III capital regulations was released Dec 30, 2011, and it is scheduled to be implemented from Jan 1, 2013.

"These guidelines envisage more stringent norms for capital adequacy," he said.

The minister also said that Indian banks had shown resilence during the global economic crisis but there was no room for complacency as the environment remained uncertain.

Mukherjee said the government was in the process of implementing an e-payment system for direct credit of dues from the central government to the beneficiaries.

The minister said the new payment system would bring transparency and expedite direct payments for subsidies from central paying units to the targeted beneficiaries of fertiliser, kerosene and cooking gas.

"All banks have to gear themselves for this path breaking governance reform and I hope Oriental Bank of Commerce will be second to none in this process," he said.

Minister of State for Finance Namo Narayan Meena, Haryana Chief Minister Bhupinder Singh Hooda and the bank CMD Nagesh Pyadah were also present on the occasion.