18 PSU banks seek capital infusion

Almost all the nationalised banks are seeking fresh infusion of funds by the government to enhance their capacity to lend and maintain healthy solvency ratio, an indicator of bank's ability to meet the long-term debt requirement.      

"Almost all...18 banks are in the list. (However) subsidiaries of State Bank of India are not entitled," said a top Finance Ministry official.     

State-owned banking sector comprises 20 nationalised banks, State Bank of India and its six subsidiaries.     

The fresh funds would basically come from the World Bank and the shortfall, if any, would be met by the government, he said, adding the total amount is yet to be worked out.     

The World Bank is providing a loan of about Rs 10,000 crore for the injection of capital in the public sector banks.     

Meanwhile, the Government of India today signed loan agreements with the World Bank for around Rs 20,000 crore credit to support the country's infrastructure projects and also for recapitalising the public sector banks.     

The fund would be released after the Parliamentary nod as it is part of supplementary demand for grants to be tabled in the winter session, the official added.     

The winter session of Parliament is expected to start from some time next month.     

As it is, Rs 2,700 crore, the official said, have been proposed in the 2009-10 Budget for recapitalisation of the four public sector banks.