The State Bank of India (SBI) on Tuesday said that its board will meet this week to consider the proposal of raising Rs 8,800 crore from the government.
The State Bank of India (SBI) on Tuesday said that its board will meet this week to consider the proposal of raising Rs 8,800 crore from the government. PTI reported that the board of India’s largest lender will also consider implementing the six-point reforms agenda drawn by the government alongside the Rs 2.11 lakh crore bank recapitalisation plan.
“The Central Board of the Bank at its meeting scheduled for February 9 will consider the proposal of raising equity capital by way of preferential allotment of equity shares of the government of India to the tune of Rs 8,800 crore,” State Bank of India (SBI) said in a BSE filing.
The government in October last year announced a massive Rs 2.11 lakh crore bank recapitalisation plan to boost the lending capacity of the 21 Public Sector Banks (PSBs), riddle with high non-performing assets (NPAs).
While unveiling the distribution plan of Rs 80,000 crore from the total Rs 2.11 lakh crore, the government also laid down laid down 6-point-reform measures for PSBs to ensure that India’s bad loans situation does not escalate in future again.
Besides announcing a lower number of lenders in the consortium, the government also said that it will look into all loans above Rs 250 crore. The government is planning to limit banks with minimum 10% of exposure to become a part of the consortium, which will bring down the number of banks in the consortium to just 6-7 from present 12-13, Finance Services Secretary Rajiv Kumar said last month.
While the IDBI Bank will receive the highest capital of Rs 10,610 crore, the SBI, with a capital infusion of Rs 8,800, crore will be the third biggest beneficiary. The Bank of India will receive Rs 9,232 crore of capital infusion.