The capital of banks will be raised by increasing the shareholding of the people in a phased manner through sale of shares largely through retail to common citizens of the country.
Announcing this in his maiden budget speech in the Lok Sabha today, Finance Minister Arun Jaitley said there is a requirement to infuse Rs. 2, 40,000 crores as equity by 2018 in the public sector banks.
To meet this huge capital requirement, additional resources have to be raised.
By selling the shares through retail, the citizens will get direct shareholdings in these banks even as the Government will continue to have majority shareholding.
Jaitley said that Government will also examine the proposal to give autonomy to the banks while making them accountable.
