The Finance Ministry is likely to soon clear the first round of capital infusion in public sector banks that has been slated for the current financial year.
New Delhi: The Finance Ministry is likely to soon clear the first round of capital infusion in public sector banks that has been slated for the current financial year.
The proposal for capital infusion is expected to get approval from Finance Minister Arun Jaitley shortly, sources said, adding that the first tranche is likely to be less than Rs 20,000 crore.
After the fourth quarter results, each bank made a detailed request for fresh fund infusion taking into account issues pertaining to non-performing assets (NPAs) or bad loans and growth projections.
Based on the suggestions, the Department of Financial Services finalised the first tranche of fund infusion, sources said.
The government has made Budget provision of Rs 25,000 crore capital infusion in public sector banks for the current fiscal. Jaitley, however, had assured the state-owned banks that the government would provide more funds if needed.
Last year, the government announced a revamp plan Indradhanush to infuse Rs 70,000 crore in state-owned banks over four years, while the banks themselves were expected to raise a further Rs 1.1 lakh crore from the market to meet their capital requirements in line with global risk norms Basel-III.
In line with the blueprint, PSU banks will get Rs 25,000 crore this fiscal. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.
During the last fiscal, 21 public sectors banks got fund support of Rs 25,000 crore. Of this, SBI got the highest amount of Rs 5,393 crore followed by Bank of India at Rs 2,455 crore.
Besides, the government infused Rs 2,229 crore in IDBI Bank, Rs 2,009 crore in Indian Overseas Bank and Rs 1,732 crore Punjab National Bank.