Thirdly, participation in infrastructure projects by banks would also be constrained by legal and prudential limits on the proportion of banks’ lending as a share of their core capital. Given the considerable financial outlays involved in infrastructure projects, commercial banks would need to enhance their capital base to participate in PPPs while remaining compliant with regulatory requirements.
First, although data on the use of cash in transactions is notoriously poor, the nominal value of per capita holdings of small-denomination bank notes--those used heavily in domestic commerce--is now growing very slowly, and the inflation-adjusted per capita value has recently declined somewhat.