First, in the context of Basel III guidelines for the banks, the additional capital requirement is estimated at ₹ trillion for the banks, of which non-equity capital will be of the order of ₹ trillion while equity capital will be of the order of ₹ trillion.
Capital augmentation of banks in future could be a challenge and this could constrain them from increasing their lending to infrastructure in line with the financing needs of the sector. Therefore, there is a clear need for a corporate debt market to serve as a source of long-term finance for corporates and as an alternate to a bank-dominated financial system.