Govt likely to make first round of capital infusion in PSBs within next few weeks

The Finance Ministry has finalised plan for the first round of capital infusion for public sector banks and funds would be granted to some of the lenders within next few weeks.

After the fourth quarter (Q4) results, each bank made a detailed request taking into account issues pertaining to non-performing assets (NPAs) or bad loans, growth projections and the like, following which the Department of Financial Services has finalised the first tranches, sources said.

Without giving the exact amount, sources said, the first tranches which would be announced in the next few weeks may be between Rs 8,000 crore and Rs 10,000 crore.

The government has already made Budget provision of Rs 25,000 crore capital infusion for public sector banks for the current fiscal. At the same time, Finance Minister Arun Jaitley has assured that the government will provide more funds it needed.

Last year, the government announced a revamp plan 'Indradhanush' to infuse Rs 70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel-III.

In line with the blueprint, public sector unit (PSU) banks will get Rs 25,000 crore this fiscal. Besides, Rs 10,000 crore each would be infused in 2017-18 and 2018-19.

During the last fiscal, 21 public sectors banks got fund support of Rs 25,000 crore. Of this, State Bank of India (SBI) got the highest amount of Rs 5,393 crore followed by Bank of India at Rs 2,455 crore.

Besides, the government infused Rs 2,229 crore in IDBI Bank, Indian Overseas Bank (IOB) Rs 2,009 crore and Punjab National Bank (PNB) Rs 1,732 crore.