The Union Finance Ministry is likely to offer capital support to some Public Sector Banks (PSBs) in the third quarter from the Rs 20,000 crore fund allocated by the Parliament in recently concluded monsoon session.
As part of the first batch of Supplementary Demands for Grants for 2020-21, Parliament allocated Rs 20,000 crore for PSB capital infusion.
The first batch of Supplementary Demands for Grants for 2020-21is planning to sought additional spending of Rs 2.35 lakh crore for meeting the expenses created due to the outbreak of COVID-19 pandemic.
As reported by Mint, the fund infusion would aim at meeting the regulatory capital requirements if the need for the same evokes in October-December quarter.
Mint also reports that the results of the second quarter result would be able to offer the exact idea pertaining to bank related regulatory requirement and accordingly recapitalisation bonds would be passed on the lenders.
Moreover, PSBs already have approvals from their shareholders for raising capital via a mix of equity and bonds during the current fiscal.
During 2019-20, the centre infused Rs 70,000 crore into PSBs for boosting credit for the economy.