Following Basel III norms would free up about Rs. 60,000 crore of capital for lenders The government will hold talks with the Reserve Bank of India (RBI) on relaxing capital norms for banks and bringing them in line with less stringent Basel III guidelines, said a senior government official. Such a move would free up an estimated Rs.60,000 crore of capital at state-owned lenders, allowing them to step up lending to fuel the reviving economy, bolster weaker banks and reduce pressure on the government to provide capital. This follows discussions by the finance ministry with Niti Aayog and other stakeholders. The minimum common equity (CET) Tier-I ratio as prescribed by RBI — money that banks need to set aside — stands at 5.5% of riskweighted assets against 4.5% under Basel III norms. There is a need to lower this to the level stipulated by the Basel Committee on Banking Supervision, said the official cited above. By freeing up capital, around Rs.6 lakh crore of lending can be achie