Decision on Rs 14K Cr fund infusion in PSU banks in 10-15 days

Financial Services Secretary Rajiv Takru is holding a meeting with heads of public sector banks on Sept 27 to review NPA situation

The government today said it will decide about capital infusion in public sector banks in the next 10-15 days as stability is returning to the market.

"Very soon now, now that markets are more or less, I see certain amount of confidence in the market and things appear to be stabilising. So anytime now (decision on capital infusion) within the next week, 10 days or fortnight," Financial Services Secretary Rajiv Takru said here.

The government has earmarked Rs 14,000 crore for capital infusion in the public sector banks during the current fiscal.

Asked if RBI has more room for rate cut following the status-quo on the stimulus programme of Fed, Takru said, "looking at every event in isolation is not fair.

"This (Fed move) would be one of the factors which the RBI will now take into account...So now this (Fed action) will be considered and we will know soon enough."

On the rising bad loans, he said: "It's not a question of being worrisome but it doesn't make us happy...It is not that the banks have got into trouble or they are in any kind of danger or anything like that. Banks are as secure as possible."

He is holding a meeting with heads of public sector banks on September 27 to review NPA situation.

Recently, Finance Minister P Chidambaram had said all public sector banks are meeting Base III requirements for capitalisation, though four of them -- Indian Overseas Bank, IDBI Bank, Bank of Maharashtra and Dena Bank -- have Tier-1 capital below 8%.

The government will take steps to ensure that these banks have 8% Tier-1 capital by the end of the current fiscal year, Chidambaram had said.

Other lenders like SBI has made a request of Rs 4,000 crore, Punjab National Bank Rs 1,500 crore while Bangalore-based Canara Bank has sought Rs 1,000 crore during the current fiscal.

Implementation of Basel III capital regulations envisage enhancing requirement of core equity capital by banks due to higher capital ratios. The Basel III capital ratios will be fully phased in as on March 31, 2018.

The government had infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.