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Govt identifies 3-4 regional rural banks for IPOs; public issue likely this year

The bank consolidation exercise is going on as the objective is to bring the number of RRBs to 38 from the current 45, they said, adding that some more consolidations will take place as state governments have given their go-ahead. The Act was amended in 2015 whereby such banks were permitted to raise capital from sources other than the Centre, states and sponsor banks. In order to improve the financial health of RRBs, the government initiated consolidation of RRBs in a phased manner in 2005. The number of RRBs came down to 133 in 2006 from 196 at the end of March 2005. As per the current scheme for recapitalisation of RRBs, the recapitalisation support is provided to RRBs by the Centre, concerned state governments and the sponsor banks in the ratio of 50:15:35, respectively to enable them to meet the regulatory requirement of capital to risk weighted assets ratio (CRAR) of 9 per cent.

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