New Delhi: The government on Wednesday announced capital infusion of Rs88,139 crore in 20 public sector banks (PSBs) during the current fiscal, with IDBI Bank getting the most at Rs10,610 crore.
Finance minister Arun Jaitley said his ministry had undertaken a detailed exercise on the amount of capital to be infused into the PSBs. The unprecedented Rs2.1 trillion bank recapitalisation plan announced in October last year was to be spread over two financial years—2017-18 and 2018-19.
During the current fiscal, ending 31 March, State Bank of India will get Rs8,800 crore capital and Bank of India Rs9,232 crore. UCO Bank will get Rs6,507 crore; Punjab National Bank Rs5,473 crore; Bank of Baroda Rs5,375 crore; Central Bank of India Rs5,158 crore; Canara Bank Rs4,865 crore; Indian Overseas Bank Rs4,694 crore and Union Bank of India Rs4,524 crore. Oriental Bank of Commerce would get Rs3,571 crore, Dena Bank Rs3,045 crore, Bank of Maharashtra Rs3,173 crore, United Bank of India Rs2,634 crore, Corporation Bank Rs2,187 crore, Syndicate Bank Rs2,839 crore, Andhra Bank Rs1,890 crore, Allahabad Bank Rs1,500 crore, Punjab and Sind Bank Rs785 crore.
Jaitley said steps need to be taken to ensure governance of banks follows highest standards and there is a need for institutional mechanism to ensure past is not repeated.
“We inherited a very major problem and therefore, we have been involved in finding a solution to that problem”, he said, adding that “our role really is not only to find a solution but also to create an institutional mechanism to make sure that what happened in the past is not repeated”.
The PSBs are faced with mounting non-performing assets (NPAs) or bad loans, putting the financial sector under stress, and need to be recapitalised. “Now the entire object of this exercise is that the government has the prime responsibility of keeping the public sector banks in good health,” Jaitley said.
Rajeev Kumar, secretary, department of financial services, said bank recapitalisation is dependent on performance and reforms undertaken by the lenders. He said loans above Rs250 crore will undergo special monitoring.