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Govt to infuse Rs 5,000 cr more into state-run banks in FY16

Funds would be infused after Parliament approves the third Supplementary Demand for Grants

BS Reporter  |  New Delhi 

Image via Shutterstock
Image via Shutterstock

A senior finance ministry official said on Wednesday the government would infuse another Rs 5,000 crore of capital in the current financial year to strengthen banks' balance sheets.

"As committed, banks would get fund infusion in the fourth quarter. Banks will get about Rs 5,000 crore," Financial Services Secretary Anjuly Chib Duggal said on the sidelines of a workshop on social security platform.

Of the Rs 25,000 crore earmarked for 2015-16, the government has pumped in about Rs 20,088 crore into 13 public sector banks.

Finance Minister Arun Jaitley had said he might provide more money to the banks, provided resources allowed him to do so.

Funds would be infused after Parliament approves the third Supplementary Demand for Grants in the upcoming Budget session.

Last year, the government had announced a plan, called Indradhanush, to infuse Rs 70,000 crore in state-owned banks over four years, while these would have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel-III.

PSBs will get Rs 25,000 crore this financial year and the next, and Rs 10,000 crore each would be infused in 2017-18 and 2018-19.

On initiatives taken by the government to deepen the social security net, Duggal said banks were addressing last-mile connectivity issues and that they can work with local kirana and post offices as points for financial inclusion, where people can get their direct benefits transfer payments.

"The Department of Financial Services is holding discussions with banks on a regular basis to sort out issues as soon as possible," she said.

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First Published: Thu, February 04 2016. 00:24 IST