PSB recapitalisation: Govt to inject Rs 23.5 bn into Central Bank of India

Capital infusion seen necessary for banks to maintain regulatory norms at the time of paying interest towards AT-1 bonds

The government has decided to infuse Rs 23.5 billion into Central Bank of India to help it meet regulatory capital requirements. 

With this, the government has so far injected around Rs 136 billion into public sector banks (PSBs) this financial year. 

The capital infusion was needed as banks have to maintain the regulatory capital requirements at the time of paying interest towards Additional Tier 1 (AT-1) bonds, a senior government official said.

The notification for releasing the funds through recapitalisation bonds to Central Bank of India was issued by the government on Monday.

AT-1 bonds are perpetual in nature and therefore provide higher interest