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Govt to infuse Rs 83,000 crore in public sector banks: Jaitley

ANI  |  New Delhi [India] 

Finance Minister Arun Jaitley on Thursday said that government will infuse Rs 83,000 crore in public sector banks in the next few months of the current fiscal.

Earlier in a day, the government proposed a bill in the Parliament seeking approval for additional recap bonds of Rs 41,000 crore in the state-owned banks through the second batch of supplementary demands for grants.

Elaborating about the proposal submitted to Parliament, Jaitley said, "The government has moved a proposal in Parliament for enhanced bank recapitalisation outlay from Rs 65,000 crore to Rs 1,06,000 crore in the current financial year to propel economic growth, cementing India's position as the fastest growing economy of the world. This would enable infusion of over Rs. 83,000 crore in the coming few months in Public Sector Banks (PSBs)."

The enhanced provision is aimed at meeting regulatory capital norms, providing capital to better-performing PCA (Prompt Corrective Action) banks to achieve nine per cent capital to risk-weighted asset ratio (CRAR); 1.875 per cent capital conservation buffer and the 6 per cent net NPA threshold, facilitating them to come out of PCA.

The non-PCA banks are very close to the PCA red-line and better-performing PCA banks will be provided with adequate capital.

He further stressed that Mission Indradhanush which was announced in 2015-16 was of Rs 70,000 crore, of which Rs 52,000 crore have already been spent and the remaining balance of Rs 18,000 crore was included in the second tranche of Rs 2,11,000 crore. "Out of this, Rs 1, 35,000 crore were the bonds and the balance was either by market raisings or sale of non-corp assets. At beginning of the year, a total amount of Rs 65,000 crore was remaining but as of today, only Rs 42,000 crore remain out of it," he added

"We will infuse additional Rs 41,000 crore into public sector banks (PSBs), making the total amount for bank recapitalisation at Rs 1.06 lakh crore in the financial year 2018-19. We have already infused Rs 23,000 crore into PSBs this year," said the Finance Minister.

Stressing on the process of recognising non-performing assets (NPAs) that began in 2015, Jaitley said, "NPA has made considerable headway. The recognition of NPAs is almost complete, the non-recognition is now at 0.59 per cent which was to the extent of about 0.7 per cent in March 2015. Last quarter has already shown that there is improved performance. The downward slide in the NPAs itself would now commence. This entire exercise will also lead to the improvement of the lending capacity of the banks itself.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, December 20 2018. 21:25 IST
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