Date:22/07/2006 URL: http://www.thehindu.com/2006/07/22/stories/2006072204531700.htm

Business

Banks can raise capital in foreign currency without approval

CHENNAI: The Reserve Bank of India on Friday allowed banks to augment their capital funds through the issue of Innovative Perpetual Debit Instruments (IPDI) in foreign currency up to 49 per cent of the eligible amount (that is, 15 per cent of Tier I capital) without seeking the prior approval of the RBI subject to compliance with certain specified conditions.

Banks may augment their capital through the issue of Upper Tier II instruments in foreign currency up to 25 per cent of their unimpaired Tier I capital without prior approval. Funds raised through the issue of these two instruments in foreign currency will be in addition to the existing limit for foreign currency borrowings by Authorised Dealers.