This process spurred by SBP’s requirement of increasing MCR of banks, will weed out weak banks and will make the banking sector well capitalized and more resilient to shocks. Moreover, it will also ensure a smooth transition to Basel 2.
Public Sector Banks viz., State Bank of India, State Bank of India subsidiary banks and Nationalized Banks which are constituted under different statutes are governed by their respective statutes and by some of the provisions of the Banking Regulation Act.