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Banking on Risk Cut in repo rate – lower than expected Aadhaar, niraadhaar and banking Monetary policy continues to adopt dis-inflationary path Lacklustre credit expansion Hesitancy in announcing year-end results Fund healthcare clinics in villages... Small finance banks offer high interest rates Emerging crisis Holy or unholy? Small is ‘more’ beautiful Ernakulam excels... Governance in Reverse Gear? Bottomlines shrink, bad loans rise... Why priority status? It’s a war on black money, support it. How okay are new banks? Rationalised Thirty more cities seek to become SMART Too big to fail and too small to sail Big bank merger, bigger expectations One down in private sector United India Insurance - Rs 110 crore losses have been claimed till now due to floods in Tamil Nadu New capitals of Migrant banks Small finance payment banks... Cautious and considerate Nothing much can happen…. Another route for achieving financial inclusion Why any time money? Growing volume of stressed assets… Grows Bigger Capital base of regional rural banks raised Who is the real beneficiary? Growing gainfully Stage set for Indian ‘avatar’ of foreign banks Drastic decline in asset quality Bank deposits account for 46.3 per cent of household savings Mega merger is on Smart banking in smart cities A new development bank rising in the east… Insatiable appetite for credit Anytime banking to anywhere banking LVB- A supermarket of financial services Drop in SLR- sparing lendable resources Banking overhauling or reorganisation? Needed a Banking Atlas Just 660 days! Target over-ambitious... Financial inclusion vs unclaimed deposits New bank licences, at last... Indian customers are tech savvy Targets continue to be ad hoc Ferrying digital banking to Lakshadweep From lazy banking to easy banking Payment banks have arrived Greet Lakshmi the banking robot Good, bad and ugly The paradox: clamour for the Goliath and David Managing NPAs... The collaboration suite of cyber criminals Perhaps small is more beautiful than big! A development bank for BRICS How ‘secure’ are the secured loans? Well-lived... All that glitters is not gold... Banking in Telangana Two banks: their jubilees and performances Reaching the Unreached… A bank for women, by women What is the priority – mergers or NPA reduction? Reaching out: is it slowing down? Cradle of banks to a smart city... Merger mania haunts banks
 
Capital base of regional rural banks raised

The Government of India is reported to have rejected the proposal of establishing Postal Bank of India, quoting the paucity of funds for subscribing to its capital. It has, however, found it expedient to enhance the authorised capital base of 56 gramin banks, though the time limit by which additional capital would be subscribed has not been specified. By amending the Regional Rural Banks Act of 1976, Government of India has raised recently the authorised capital of gramin banks from Rs.5 crore to Rs.2000 crore.  The fully paid up value of each share would be Rs.10 as against Rs.100 at present. This measure is intended to permit non-government agencies and individuals to subscribe to the share capital. At present Government of India holds 50 per cent, state government 15 per cent and the sponsoring banks 35 per cent of the total capital employed.

The total subscribed share capital of these banks, including the share capital deposits, is Rs.6367 crore as on March 2014. Since 2010, Government of India has contributed Rs.1038.14 crore to 38 gramin banks for recapitalisation. The state governments’ contribution was Rs.311.49 crore and that of sponsor banks was Rs.726.78 crore. If Government of India along with the state governments, decide to dilute shareholding from 65 per cent to 51 per cent, the volume of capital infusion required would be very huge. Shares of gramin banks may not be very attractive proposition for the general investors. Employment Stock option may be one way of filling the gap.

State governments, with 15 per cent capital participation, have been passive owners of gramin banks. These 15 percent of the shares may be offered to the public for subscribing, after the authorised capital is enhanced. A beginning in this direction can be made in the case of the bigger gramin banks, some of which have larger branch networks, compared to private sector banks of the old generation.

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