Public sector banks may get Rs 50,000-crore government fund by year-end

NEW DELHI: The government is planning to infuse Rs 45,000-50,000 crore as capital in public sector banks by the end of December, a senior finance ministry official said on Tuesday. “We have around Rs 45,000-50,000 crore of funds pending with us as capital for this year, which we are planning to infuse into various banks by December-end,” the official said. So far this fiscal, the government has infused Rs 19,850 crore into seven state banks, including PNB, Corporation Bank, Central Bank of India, and Allahabad Bank through recapitalisation bonds.

The Budget for 2018-19 had projected issuance of bonds worth Rs 65,000 crore to infuse funds into PSBs. This means recapitalisation bonds worth Rs 45,150 crore can be issued by March. Bank-wise quantum of the next tranche of recapitalis-ation bonds will be based on growth projections and regulatory requirements of banks. Almost all 21 PSBs, particularly the 11 lenders operating under the RBI’s prompt corrective action framework, have sought capital from the government to boost credit and meet regulatory requirements.

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