The capital of banks will be raised by increasing the shareholding of the people in a phased manner through sale of shares largely through retail to common citizens of the country. Announcing this in his maiden Budget Speech in Lok Sabha today, the Finance Minister Shri Arun Jaitley said that there is a requirement to infuse ₹ 2,40,000 crores as equity by 2018 in the Public Sector Banks. To meet this huge capital requirement, additional resources have to be raised. By selling the shares through retail, the citizens will get direct shareholdings in these banks even as the Government will continue to have majority shareholding. Shri Jaitley said that Government will also examine the proposal to give autonomy to the banks while making them accountable.

Capital raising through retail share sale expands public shareholding while government retains majority and examines bank autonomy. Capital mobilisation for public sector banks will be achieved through phased retail share sales to increase direct public equity participation while the government retains majority ownership; the plan links this capital infusion mechanism to consideration of greater bank autonomy subject to accountability measures.