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Govt looking at enhancing capital allocation for PSBs: Jaitley

Government is examining the possibility of suitably enhancing the capital allocation for public sector banks (PSBs) during this fiscal, Finance Minister Arun Jaitley has informed the Rajya Sabha.

New Delhi: Government is examining the possibility of suitably enhancing the capital allocation for public sector banks (PSBs) during this fiscal, Finance Minister Arun Jaitley has informed the Rajya Sabha.

"If the need be, government is also examining the possibility of suitably enhancing the capital allocation for the PSBs this year," he said in a written reply to the upper house.

A budgetary allocation of Rs 7,940 crore has been made in this regard during the current fiscal, he said.

Besides, he said, the government has taken a decision to allow PSBs to raise capital from the market through follow-on public offer (FPO) or Qualified Institutional Placement (QIP).

This will bring down the government's shareholding up to 52 percent so as to decrease banks' reliance on capital infusion from government.

Government has been infusing capital in PSBs with twin objective of adequately meeting the credit requirement of the productive sectors of economy as well as to maintain regulatory capital adequacy ratios in PSBs, he said.

He further said the government , as majority shareholder, is committed to keeping all PSBs adequately capitalised.

In a separate reply, Minister of State for Finance Jayant Sinha said out of 24 life insurers, 4 have indicated that they have 75 life insurance products for people living with HIV (PLHIV).

Rest have indicated that they do not offer any product to PLHIV, Sinha said, adding, two standalone health insurers out of 28 general insurance companies are offering one product each to PLHIV.

In addition, he said, Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is one insurance product which is offered to PLHIV, where there are no additional underwriting requirements.