ministry may infuse about Rs 70,000 crore through recapitalisation bonds
in the non-performing asset (NPA)-hit public sector banks
in the next four months, sources said.
Currently, the government
is in process of finalising the structure of bonds and decision could be made by the end of this month.
Once the structure is in the place, the government
would front-load bond issuance. The preliminary assessment indicates it could be between Rs 70,000 crore and Rs 80,000 crore, sources privy to the development said.
However, nothing has been finalised yet, the official sources said, adding that the finance
ministry would get better picture of requirements of various banks
after the second quarter results are out.
of public sector banks
alone have increased from Rs 2.75 lakh crore in March 2015 to Rs 7.33 lakh crore as on June 2017.
Besides recapitalisation bonds, the finance
minister had announced that banks
would get about Rs 18,000 crore under the Indradhanush plan over the next two years. Under Indradhanush road map announced in 2015, the government
had announced to infuse Rs 70,000 crore in state- run banks
over four years while they will have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirement in line with global risk norms, known as Basel-III.
In the last three-and-half years, the government
has pumped in Rs 51,858 crore capital in the public sector banks.
Remaining Rs 18,142 crore would be pumped into banks
over two years.