Since the financial year ending March 2014, the government has infused Rs 35,547 crore of equity into 21 public sector banks, including State Bank of India (SBI), Bank of Baroda (BoB) and Punjab National Bank (PNB).
Hit by mounting bad loans, three public sector banks, namely Central Bank of India, Allahabad Bank and Dena Bank, reported losses while Punjab National Bank posted a sharp decline in profit for the third quarter of 2015-16.
Concerned over "unacceptable" NPA levels, Finance Minister Arun Jaitley today discussed with PSU bank chiefs the issue of wilful defaulters and said that the lenders have all the powers and autonomy to deal with them.
Government is open to dilute its stake in public sector banks to 52 per cent, Finance Minister Arun Jaitley said and promised more steps to tackle bad loan problems including those involving state power providers.
Finance Minister Arun Jaitley sought parliamentary approval to spend a net additional $4 billion in the current fiscal year, almost half of it earmarked to inject capital into state-run banks struggling with bad debts.
With capital needs for public sector banks pegged at Rs 2.39 lakh crore over the next four years, the Finance Ministry said they have been allowed to raise funds from market to meet capital requirements.