Govt to infuse Rs 83,000 cr in public sector banks

Govt to infuse Rs 83,000 cr in public sector banks

Agency News

New Delhi, Dec 20: The Government on Thursday announced that it would infuse more than Rs 83,000 crore in public sector banks in coming few months.

Union Finance Minister Arun Jaitley told a press conference that they have also moved a proposal in Parliament for enhanced bank recapitalization outlay from Rs 65,000 crore to Rs 1,06,000 crore in the current financial year to propel economic growth and cementing India’s position as the fastest growing economy of the world.

For the purpose, the Government has also demanded an additional amount of Rs 41,000 crore from Parliament earlier in the day during their Supplementary Demands for Grants for investing in the public sector banks.

The Minister said all non-performing assets (NPAs) have almost been recognized and they have declined from the peak of 7.0 per cent in March 2015 to 0.59 per cent in September this year.

He added: 'The recognition of NPAs is almost complete, the non-recognition is now at 0.59 per cent which was to the extent of about 7.0 per cent in March 2015. Last quarter has already shown that there is an improved performance. The downward slide in the NPAs itself would now commence.”

The record recovery of Rs 60,726 crore has been effected by PSBs in the first half of the current financial year, which is more than double the amount recovered over the corresponding period last year. Last year, the amount was Rs 29,302 crore.

Department of Economic Affairs Secretary Rajiv Kumar said the government would also provide capital to better-performing banks to come out of RBI’s prompt corrective action (PCA) framework. The PCA banks would be recapitalise to achieve 9 per cent Capital to Risk-weighted Asset Ratio (CRAR); 1.875 per cent Capital Conservation Buffer and the 6 per cent Net NPA threshold, to come out of PCA.

Mr Kumar said around four to five banks would be given additional recapitalisation who are on threshold and have a high chance of coming out of PCA. Names of these banks, however, would be given later.

“Besides, banks will also receive capital infusion for merger,” he added. (UNI)