PSU banks to raise Rs 10,000 crore in two months: DFS Secretary

By: |
February 2, 2021 7:53 PM

In the last few months, lenders including State Bank of India, Canara Bank and Punjab National Bank (PNB) have raised about Rs 50,000 crore from the market.

PSU Banks fundraiseRBI Governor Shaktikanta Das has been advising banks to proactively raise capital and not wait for a difficult situation to arise due to the ongoing COVID-19 crisis.

Public sector banks (PSBs) are planning to raise about Rs 10,000 crore through a mix of equity and debt in the remaining two months of the current fiscal ending March to support credit pick up and meet regulatory requirements.

In the last few months, lenders including State Bank of India, Canara Bank and Punjab National Bank (PNB) have raised about Rs 50,000 crore from the market.

“Banks have raised about Rs 50,700 crore from the market and we expect another Rs 8,000-10,000 crore to be raised in the remaining part of the year,” Financial Services Secretary Debasish Panda told PTI.

With regard to COVID-stress, he said banks have made good enough provisions anticipating slippages.

The government’s allocation of Rs 20,000 crore for 2021-22 would act as a buffer and used as and when required, he added.

In December 2020, Canara Bank raised Rs 2,000 crore while Punjab National Bank (PNB) raised Rs 3,788.04 crore through qualified institutional placement (QIP).

RBI Governor Shaktikanta Das has been advising banks to proactively raise capital and not wait for a difficult situation to arise due to the ongoing COVID-19 crisis.

Besides, the government has allocated Rs 20,000 crore for capital infusion into PSBs in the current fiscal. Of this, the Finance Ministry has granted Rs 5,500 crore to Punjab & Sind Bank to meet the regulatory requirement. The government approved capital infusion through preferential allotment of equity shares in Punjab & Sind Bank last month.

During 2019-20, the government made Rs 70,000 crore capital infusion into the PSBs to boost credit for a strong impetus to the economy.
Punjab National Bank got Rs 16,091 crore, Union Bank of India received Rs 11,768 crore while Canara Bank and Indian Bank got Rs 6,571 crore and Rs 2,534 crore, respectively.

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