1. Govt to soon finalise additional fund infusion for PSU banks

Govt to soon finalise additional fund infusion for PSU banks

The Finance Ministry is expected to soon finalise additional capital infusion of about Rs 12,000 crore for public sector banks and seek Parliament's nod for the sanctioning of funds.

By: | New Delhi | Published: July 16, 2015 6:43 PM
Arun Jaitley

The Finance Ministry is expected to soon finalise additional capital infusion of about Rs 12,000 crore for public sector banks and seek Parliament’s nod for the sanctioning of funds. (PTI)

The Finance Ministry is expected to soon finalise additional capital infusion of about Rs 12,000 crore for public sector banks and seek Parliament’s nod for the sanctioning of funds.

All state-owned banks have submitted their requirements but the ministry is yet to decide on the recapitalisation amount, sources said.

It is expected that Finance Minister Arun Jaitley would the amount soon so that the Parliamentary nod could be sought through supplementary demand for grants, they said.

Funds have to be sought under supplementary demand for grants because it is going to be over and above the amount which was provided for in the Budget 2015-16.

It could be included in the supplementary demand for grants to be tabled either in the current or the next session.

Finance Secretary Rajiv Mehrishi had recently said that government is likely to infuse additional USD 1.8 billion (about Rs 11,500 crore) in public sector banks this fiscal over and above USD 1.2 billion earmarked in the Budget.

For the current fiscal, the government has allocated Rs 7,940 crore in the Budget for capital infusion in state-owned banks but the government has pledged to provide more in the current fiscal.

Jaitley last month promised banks to provide more than the budgeted amount this fiscal.

The Reserve Bank top officials have at more than one occasion emphasised the need for additional fund infusion because it will give them a buffer.

It would also allow banks to take some decisions which may imply that they would need to use some of that capital for cleaning of the balance sheet, RBI Governor Raghuram Rajan had said earlier this month.

The government has already completed the assessment of capital requirement of all public sector banks earlier this month.

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