INSUBCONTINENT EXCLUSIVE:
Large banks, however, are less likely to get any additional infusion this fiscal year to March.NEW DELHI: The government will pump Rs 42,000
crore into debt-laden public sector banks in the remainder of the current financial year to March to improve their financial health, a
senior Finance Ministry official said on Monday
"We will infuse the next tranche of recapitalisation in public sector banks by mid-December
About Rs 42,000 crore remains to be infused as capital in the banks in the current financial year," the official said
The Rs 42,000 crore capital infusion is part of the Rs 2.11 lakh crore, two-year, front-loaded bank recapitalisation plan announced by the
government in October 2017 to support credit growth.While recapitalisation of banks will be based on regulatory capital requirement and also
on the need to fuel growth, large banks like State Bank of India and Punjab National Bank (PNB) are less likely to get any additional
infusion this fiscal year to March.The government is going ahead with the remaining capital infusion plan despite the Reserve Bank of India
(RBI) extending the deadline for meeting the Basel III norms by a year.On November 19, keeping the capital adequacy ratio for banks
unchanged at 9 per cent, the RBI extended the deadline to meet Basel III norms from March 2019 to March 2020 in order to increase the
current lending capacity of banks.Further, the official said four to five public sector banks, whose NPAs have gone down and current
account-savings account ratios (CASA) have improved, may come out of the RBI's prompt corrective action (PCA) framework.Currently, 11
banks with high bad debts are under the PCA framework that prohibit them from further lending
On the insistence of the central government, the RBI's Board for Financial Supervision is expected to meet soon on the issue.The
government's Rs 2.11 lakh crore recapitalisation was to be funded through sale of bonds worth Rs 1.35 lakh crore, budgetary provisions of
Rs 18,139 crore and Rs 58,000 crore from the market by diluting the government's equity share.Of the Rs 1.35 lakh crore, the government
has already recapitalised banks with Rs 82,000 crore
In July, it infused Rs 11,336 crore in five banks - PNB, Allahabad Bank, Andhra Bank, Indian Overseas Bank and Corporation Bank.
