The government intends to provide $9 billion (about Rs 57,000 crore) to public sector banks towards recapitalisation over the next two fiscal to meet global risk norms and for growth, Finance Secretary Rajiv Mehrishi said on Monday.
“What we are aiming at is an infusion of about $3 billion in the current year and perhaps twice as much in the next year. So, that is the broad time schedule – whether it will happen in August or January I can’t say,” he told a television news channel.
“It doesn’t have to wait for the Budget because it is a process that is ongoing and we can always seek additional funds within the supplementaries. So, it doesn’t have to wait for the Budget. We have already some budget allocation provision there, we can use that to begin with and that is a billion dollar plus and we intend to increase that,” he said.
The government has earmarked Rs 7,940 crore in the Budget for recapitalisation of PSU banks for the current fiscal.
Earlier this month, Finance Minister Arun Jaitley promised more capital infusion into public sector banks, saying there’s “merit” in their demand for more funds over and above what was provided in the Budget.
“Banks have made a strong case for additional capital… And over the next few months, this is something the government is going to seriously look at,” Jaitley had said.
The government has already started assessment of capital requirement of public sector banks. It has already received presentation of six public sector banks.