Finance Ministry likely to issue first tranche of recapitalization bonds to PSBs in January

The recapitalization bonds will not be sold in open market and will be issued to all banks.

New Delhi: The Finance Ministry is likely to issue first tranche of  recapitalization bonds to public sector banks (PSB) in early January.

Finance Ministry sources have said that recapitalization bonds will not be sold in open market and will be issued to all banks.

The government plans to infuse Rs 76,000 crore capital by giving it space in budgetary allocation and through markets, and rest 1.35 lakh crore by issuing recapitalisation bonds.

Apart from this, government will also infuse capital worth Rs 8000 crore on basis of performance.  Around Rs 8,000 crore PSB capital infusion is still available from Budget 2018, sources said.

In October this year, the government had announced an infusion of Rs 2.11 lakh crore capital into the public sector banks over a period of two years.

Out of this, Rs 1.35 lakh crore will be through the recapitalisation bonds, while the remaining Rs 76,000 crore would be from the budgetary support.