Govt to infuse over Rs 88,139 crore in 20 PSBs

24 January,New Delhi


The government today announced 88,139 crore capital infusion in 20 Public Sector Banks (PSBs) during the current fiscal to boost lending and revive growth.

The capital infusion plan for 2017-18 includes 80,000 crore rupees through Recapitalization Bonds and 8,139 crore rupees as budgetary support. IDBI Bank will get the highest amount of 10,610 crore rupees followed by State Bank of India 8,800 crore rupees.

Bank of India, will get 9,232 crore rupees, UCO Bank 6,507 crore rupees, Punjab National Bank 5,473 crore rupees, Bank of Baroda 5,375 crore rupee, Central Bank of India – 5,158 crore rupees.

Other banks that will receive the capital infusion during this phase are Canara Bank , Indian Overseas Bank , Union Bank of India, Oriental Bank of Commerce , Dena Bank, Bank of Maharashtra, United Bank of India, Corporation Bank, Syndicate Bank , Andhra Bank and Allahabad Bank in the range of 4,865 crore rupees to 1,500 crore rupees. Punjab and Sind Bank will get the lowest 785 crore rupees.

In October last year, the government had announced over two lakh crore rupees bank recapitalization plan spread over spread over two financial years 2017-18 and 2018-19. The plan will address the regulatory capital requirement of all PSBs and provides a significant amount towards growth capital for increasing lending to the economy.

Unveiling the details of the re-capitalization of Public Sector Banks, Finance Minister Arun Jaitley said in New Delhi that NDA government inherited a very major problem and therefore, the incumbent government has been involved in finding a solution to that problem.

Jaitley said, the government has the prime responsibility of keeping the public sector banks in good health. He said, stringent norms for disbursal of high value loans have been framed, with strict surveillance on big loan defaulters and mandatory reporting of loans of over 250 crore rupees.

Giving presentation on banking reforms, Secretary Department of Financial Services, Rajeev Kumar said, repositioning PSBs will lead the growth and serve people responsibly and responsively.

He said, the recapitalization would be dependent on performance and reforms. He said, banks will have to adopt the differentiated business strategy and exit from non-core businesses and focus on their core competencies.

Kumar said, the Finance Ministry would gauge the performance of banks on parameters like customer responsiveness, responsible banking, credit off-take, MSME lending, deepening financial inclusion and digitalisation.

He said,the government would come out with EASE (Enhanced Access and Service Excellence) – Index for ranking of banks. He said, it would increase public accountability of PSBs as independent agencies to evaluate and rank PSBs annually on reforms.

He said the government will not interfere in commercial decisions taken by banks so that they are independent but they have to undertake reforms and do prudent and clean lending.

He said, every deposits of the people in banks are safe as banks are the article of faith. The PSBs are faced with mounting non-performing assets (NPAs) or bad loans, putting the financial sector under stress.

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