RBI may increase new banks' minimum capital requirement to Rs 1000 cr

In a bid to strengthen the risk aversion capacity of the bank to meet the liquidity crisis, the Reserve Bank of India may issue new guidelines to the newly licensed bank to increase the minimum capital requirement to Rs 1,000 crore from the currently proposed Rs 500 crore, said a senior official with direct knowledge of the development.

"Low capital base may not bear the systemic shocks. Low capital would put the newly licensed bank to take high risk and reward route, instead of building a balanced portfolio," certain media report said.

Earlier, in its draft guidelines in August, the RBI had proposed a minimum capital requirement of Rs 500 crore for any entity applying for a new bank license.

However, the central bank may make changes in the guidelines after receiving various comments from industry urging to increase in the limit

Read more about: rbi
Story first published: Monday, July 16, 2012, 9:31 [IST]
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