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Performance-based fund infusion for public sector banks unlikely

State-run banks may not get capital based on their performance and reform measures

Punjab National bank
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Punjab National bank is an Indian multinational banking and financial services founded in 1894 | Photo: Shutterstock

Somesh Jha New Delhi
The government may ditch its plans to infuse capital into public sector banks (PSBs) based on their performance and reform measures this financial year, as it looks to pump in money to meet regulatory requirements and help grow loan books of the banks.

This comes following demands from PSBs, during the annual review meeting with Finance Minister Arun Jatiley on Tuesday, that they may require early funds from the government to help them in lending more to the industry. 

In its latest move, the government has decided to infuse Rs54.3 billion in the Punjab National Bank (PNB), which was hit