The extent of additional capital that would be required to implement these revised standards will be substantial. To reach the current capital levels with the present prudential norms, it required, during the last five years Rs. 6,000 crore, which the eight public-sector banks raised from the capital market. The revisednorms, which the current monetary policy announced, require significantly higher levels of capital accretion than that has taken place in the recent past. Given the centre's fiscal restraints for recapitalisation of banks to the fullest extent, it will be feasible if measures enabling banks to raise capital on their own are evolved to the extent possible. Towards this end, an important impediment to overcome will be the removal of restriction imposed by legislation in allowing nationalised banks to raise capital from the public only up to 49 per cent of equity.

It is also important to take the measures announced by the Reserve Bank of India with seriousness, and evolve strategies to implement them in letter and spirit. These measures, if implemented to the desired extent, will facilitate Indian banks in avoiding certain difficulties, which banking systems in many emerging economies have been experiencing recently. Banks must improve their bottomlines through expansion of business using new and innovativeactivities, and by reducing expenditure.

IBA will make endeavours to make impact studies arising out of implementation of these measures, which could be helpful in making proper assessment of industry-level initiatives required in this regard.