Bank Investment Company

The Finance Ministry is examining avenues for affordable capital infusion in public sector banks (PSBs), including setting up of a Bank Investment Company (BIC).

  • The step has been taken as RBI raised concerns over the issuance of zero-coupon bonds for recapitalisation of PSBs.
  • Setting up a Bank Investment Company (BIC) as a holding company or a core investment company was suggested by the P.J. Nayak Committee in its report on ‘Governance of Boards of Banks in India’.

Need

  • With mounting capital requirement owing to rising Non-Performing Assets (NPAs), the government resorted to recapitalisation bonds with a coupon rate for capital infusion into ....
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