to 26% from 10% for private banks, and to 10% from 1% for government banks. The sector could see greater investor interest if this trend to increase private participation continues. But foreign banks are unlikely to be willing to hold significant minority stakes given the punitive capital-deduction requirements under Basel III for holding investments greater than 10% in other financial institutions.
The bank reforms also relaxed the rules for public sector banks to access capital markets, allowing for the issuance of preference shares and rights or bonus share issues. The ability to raise capital through various means could help the banks with the transition to Basel III.