Bank recapitalisation: Govt allocates Rs 22,915 crore to 13 public sector banks

Zee Media Bureau

New Delhi: Government will infuse Rs 22,915 crore in 13 public sector banks for the current fiscal ending March 2017.

Rs.22,915 crore has been allocated to Public Sector Banks as part of the capitalisation plan during the year 2016-17.

— Ministry of Finance (@FinMinIndia) July 19, 2016

The recapitalisation is aimed at shoring up the PSBs lending capacities that are restricted by poor asset quality and weak capitalisation.

pic.twitter.com/dk5i0rfApW

— Ministry of Finance (@FinMinIndia) July 19, 2016

Gross bad loans, as a proportion of the total advances by these banks, rose to 7.6 percent, a 12-year high in March 2016, according to the Reserve Bank of India’s latest financial stability report released on June 28.

Last year, the government had announced a revamp plan ‘Indradhanush’ to infuse Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from markets to meet their capital requirements in line with global risk norms Basel-III.

In line with the blueprint, PSU banks were given Rs 25,000 crore in the last fiscal. As per the plan, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.