The Indian federal cabinet on Thursday approved a bill to amend the banking regulations act that will make it easier for banks to raise capital in Asia's third-largest economy. The bill seeks to help further liberalise the Indian banking sector, Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia said at a financial conference on Thursday.
The amendments seek to liberalise the norms for raising capital via preference shares by India's private-sector banks, said a government source, who did not want to be named as the details of the bill are not public yet. The bill proposes to strengthen the central bank's powers on bank mergers and enables state-run banks to raise capital through bonus shares and rights issues by removing the 10-percent cap on voting rights of a shareholder, the source said.
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