Indradhanush Scheme – Basel III Norms


  1. The Public Sector Banks (PSBs) play a vital role in India’s economy.
  2. In the past few years, because of a variety of legacy issues including the delay caused in various approvals as well as land acquisition etc., and also because of low global and domestic demand, many large projects have stalled.
  3. Public Sector Banks which have got predominant share of infrastructure financing have been sorely affected.
  4. It has resulted in lower profitability for PSBs, mainly due to provisioning for the restructured projects as well as for gross NPAs.
  5. Thus to revive the fortunes of public sector banks, government unveiled a seven-point plan encompassing Rs 20,000 crore immediate fund infusion, creation of a single holding company and minimising political interference.
  6. The government has named this as ‘Indradhanush’ that also includes setting up of a Bank Board Bureau (BBB) for broad-level appointments and a performance-based monitoring mechanism.
  7. The strategy, Indradhanush (rainbow), focuses on systemic changes in state-run lenders, including a fresh look at hiring, a comprehensive plan to de-stress bloated lenders, capital infusion, accountability incentives with higher rewards including Stock Options and cleaning up governance.

The 7 Elements includes:

  1. Appointments
  2. Bank of Board Bureau
  3. Capitalization
  4. De-Stressing Public Sector Banks
  5. Empowerment
  6. Framework of accountability
  7. Governance Reforms
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