10 PSU banks submit turnaround plans to centre for fund infusion

For getting fund infusion, around 10 Public Sector Banks have submitted their turnaround plans to the centre.

The list of banks includes Bank of India, IDBI Bank, and Union Bank.

 “It has been decided that any future capital infusion in these banks shall be subject to achievement of select agreed upon milestones as per turnaround plan on a quarterly basis,” said Minister of State for Finance Santosh Kumar Gangwar in a written reply to Rajya Sabha.

“According to the recent update, Indian Overseas Bank is in the process of preparing its turnaround plan.Allahabad Bank, Andhra Bank, Central Bank of India, Dena Bank, UCO Bank, United Bank of India and Bank of Maharashtra are the other public sector lenders that have already submitted their plans to the government,” he said.

Reportedly, the centre has formed a monitoring mechanism where the performance of these banks would be quarterly monitored by SBI Capital Markets.

SBI Capital Markets in return would keep the department of financial services updated about the same.

“Banks that will not be able to deliver on the agreed upon turnaround plan for a period of two years will be identified as banks eligible for alternative recourse,” Gangwar added.

During the recapitalisation exercise performed during last fiscal, the Central Government had decided that 25 per cent of the total capital requirement of banks (Rs 8,586 crore) will be allocated after achievement of benchmarks set up for select parameters.

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