RBI’s new Basel III guidelines, notified on Wednesday, pose a challenge not just in terms of how banks are going to find the R1.5-2 lakh crore of fresh capital, but also in terms of their ownership structure. Indeed, since the focus is more on Tier 1 capital which has been redefined to include mainly common equity-equity capital and reserves, this implies that banks will be further challenged going ahead. The issue of where the capital is going to come from is more pertinent for the public sector banks which have so far been dependent on the Budget for funding............
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