6 PSBs to get Rs 7577 crores

Moneylife Digital Team 04 January 2018

Economy & Nation

According to the Press Trust of India, the finance ministry approved proposal for infusion of Rs7,577 crore in 6 weak PSBs – Rs2,257 crore in the Bank of India, Rs2,729 crore in IDBI Bank, Rs650 crore in Bank of Maharashtra, Rs243 crore in Dena Bank, Rs1,375 crore in UCO Bank and Rs323 crore in Central Bank of India.

The actual fund infusion will take place in the next few weeks after they get necessary regulatory approval, including nod from shareholders and will be through the issue of preference shares to the Government.

Finance Minister Arun Jaitley in October had announced an unprecedented Rs2.11 lakh crore mega-recapitalisation plan for ailing public sector banks, reeling under high non-performing assets (NPAs) or bad loans. Their NPAs have more than doubled to Rs7.33 lakh crore as of June 2017, from Rs2.75 lakh crore in March 2015.

Except for the Rs2.11 lakh crore; Mr Jaitley had also announced that banks would get about Rs18,000 crore under the Indradhanush plan over the next two years. In the last three-and-a-half years, the government pumped Rs51,858 crore capital in the PSBs. The remaining Rs18,142 crore will be injected into the banks over the next two years.

The Indradhanush plan was initiated to resolve issues faced by PSBs related to private sector lending policies. Under this plan, the government had announced infusion of Rs70,000 crore in state- owned banks over four years from 2015-2019, while they will have to raise a further Rs1.1 lakh crore from the market to meet their capital requirement in line with global risk norms, known as Basel-III.

Comments

User

anil kumar srivastava

8 years ago

Since banking business thrieves on money of depositors, it should have only income as difference between rate of interest on loan and interest paid on deposits. Any kind of service charges from depositors regular customers negates the basics of the banking system. However, it may have service charges from non-depositors depositor customers with cost effective limits. In case if loss accounted by the banks is sheer result of banks mismanagement; for which regular depositors should not be made to suffer especially when the India as developing country is heading for digital financial services. There should be regulatory body for the same with effective participation of depositors/ regular customers .

Chakravarthy R

8 years ago

Privatise banks.