Bank capitalisation: Govt may seek Parl nod for additional fund

Last Updated: Thursday, October 20, 2011 - 00:50

New Delhi: Assuring that all public sector banks will be fully capitalised, Finance Minister Pranab Mukherjee Wednesday said the government will seek the Parliament approval for additional funds, if required.
"Adequate resources will be provided for the recapitalisation of the public sector banks... If additional sum is required, I will go for the second supplementary (in the Winter Session)," Mukherjee said in the question-answer session at the Economic Editors conference here.
He said the government was committed to ensuring 8 percent tier I or equity capital in all the PSU banks.
"I assure that adequate capital will be injected into SBI, which has been downgraded, and the target is to have 8 percent of tier I capital of all the PSU banks," he added.
Financial Services Secretary D K Mittal said the capital requirement of PSU banks, including SBI, for the fiscal is estimated at between Rs 10,000-20,000 crore, depending upon different conditions.
The government has already made a provision to infuse Rs 6,000 crore in public sector banks in the current fiscal. The money, however, is yet to be disbursed.
Mittal said that five to six PSU banks, including SBI, Bank of India, Bank of Baroda, Syndicate Bank and Indian Bank would need capital infusion during the current fiscal.
Mittal also said that there would be no rights issue of State Bank of India (SBI) this fiscal due to the prevailing market conditions. SBI is awaiting government nod for a Rs 20,000 crore rights issue to strengthen its capital.
The government during 2010-11 had provided the capital support to the tune of Rs 20,157 crore to public sector banks. The lenders which got funds from the government last fiscal include Punjab National Bank and Bank of Baroda.


First Published: Thursday, October 20, 2011 - 00:50

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