JOIN USIn 2010-11, the government is providing Rs 20,157 crore for infusion in public sector banks to maintain Tier I CRAR at 8 per cent and increase the government equity in some banks to 58 per cent.
In the last Budget, it was announced that the RBI would give banking licences to private sector players, he said. Various entities like Reliance Capital, IndiaBulls, Religare, IL&FS, IDFC, IFCI and Aditya Birla Financial Services are reported to be mulling entering the banking space.
The Budget also said it will provide capital support to the tune of Rs 6,000 crore to public sector banks during the next fiscal to strengthen their capital base.
As part of recapitalisation exercise, the government approved infusion of Rs 6,211 crore into five banks in June 2010.
Banks, which had got capital support from the government in the first tranche included Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.
The second tranche, announced earlier this month, also provided capital support for several public sector banks, including Corporation Bank, UCO Bank, Indian Overseas Bank and United Bank of India.
In addition, he also announced the recapitalisation of Regional Rural Banks (RRBs). The finance minister also said housing loan up to Rs 25 lakh will be treated as prisority sector lending.
Builders, however feel that this stipulation may not help much as in most cities houses cost more than Rs 25 Lakh.
The finance minister also said in his Budget speech that a legislation will be introduced in the current session to ammend regulations.