Centre mulls BIC model for bank recap

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centre mulls bic model for bank recap Daily Current Affairs Article 20th January 2021: The Finance Ministry is examining other avenues for affordable capital infusion, including setting up of a Bank Investment Company (BIC) with the RBI raising concerns over the issuance of zero-coupon bonds for recapitalisation of public sector banks (PSBs).

Setting up a 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’.

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The report recommended transferring shares of the government in the banks to the BIC which would become the parent holding company of all these banks; as a result of this, all the PSBs would become ‘limited’ banks.

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