ALSO READInvestment calls should be based on market, not ministers' will: Jaitley Modi govt has changed public opinion in favour of FDI in defence: Jaitley Issue of low corporate investment to be addressed soon: Arun Jaitley Prefer merger among stronger banks: Arun Jaitley Govt to set up alternative mechanism to fast track PSBs merger
Last month, the government had unveiled a staggering Rs 2.11 lakh crore two-year road map to bolster NPA-hit public sector banks, which includes recapitalisation bonds, budgetary support and equity dilution.
Addressing heads of state-owned banks at 'PSB Manthan' in Gurgaon, Jaitley said the government has decided to put in more capital from the Budget, through bonds and banks' equity expansion and "therefore, it is the country, which is virtually going to pay to keep the banking system in good health".
The finance minister assured the bankers who gathered here that "you won't find us interfering" in commercial transactions, but "when the system is making all these changes and all these monetary contributions in order to strengthen the banking system, we want robust public sector banking system so that your ability to support growth itself increases".
"...we need the third engine also to fire and a robust private sector, MSME sector so that optimum growth rate which we have the potential for can be reached," he said.
Non-performing assets of PSBs have increased to Rs 7.33 lakh crore as of June 2017, from Rs 2.78 lakh crore in March 2015.