RBI unlocks Rs. 40,000 crores additional capital for banks

The Reserve Bank of India (RBI) on Tuesday relaxed norms relating to the treatment of certain balance-sheet items, including property, which will help banks unlock capital totalling about Rs. 40,000 crores.
•    The revised RBI norms will give public sector banks (PSB) access to additional capital of INR 35,000 crore.
•    Banks have now been allowed to include some items, such as property value and foreign exchange, for calculation of Tier 1 capital (CET1), instead of Tier 2 capital, according to the daily.
•    State Bank of India (SBI) will be one of the biggest beneficiary from the change in the carrying amount of a bank’s property on the balance sheet, as it has huge real estate across the country, says the paper.
•    As per the new RBI norms, CET1 capital, comprising paid-up equity capital, statutory reserves, capital reserves, other disclosed free reserves (if any) and balance in P&L Account must be at least 5.5 per cent of risk-weighted assets.