Bank's borrowing from global multilateral financial institutions are intended to be used for general banking business and not for capital augmentation, Parliament was informed today.
Reserve Bank of India in June this year allowed banks to borrow from international or multilateral financial institutions without approaching the RBI for a case by case approval, Minister of State for Finance Jayant Sinha said in a written reply in Rajya Sabha.
The institutions can be international or multilateral financial institutions of which government is a shareholding member or which have been established by more than one government or have shareholding by more than one government and other international organisations, Sinha said.
"Such borrowings should be for the purpose of general banking business and not for capital augmentation," the minister said.
He was replying to a question if the RBI allows banks to borrow from global multilateral financial institutions for general banking business.
