In line with its announcement earlier, the Finance Ministry is likely to soon clear the first round of capital infusion in public sector banks (PSBs) slated for the current financial year.
The proposal to infuse capital is in these PSBs is likely to get the nod of Finance Minister Arun Jaitley soon, according to sources in the ministry, and that the first tranche could be around Rs.20,000 crore.
After the announcement of fourth quarter results, each bank made a detailed request for fund infusion taking into account issues pertaining to non-performing assets (NPAs) or bad loans and growth projections.
Following this, the Department of Financial Services under the Finance Ministry finalised the first tranche of fund infusion, sources added.
The government has made Budget provision of Rs 25,000 crore capital infusion in public sector banks for the current fiscal. Jaitley, however, had assured the state-owned banks that the government would provide more funds, if required.
Last year, the government announced a revamp plan ‘Indradhanush’ to infuse Rs.70,000 crore in state-owned banks over the next four years. Under the plan, the banks themselves are expected to raise a further Rs 1.1 lakh crore from the market to meet their capital requirements.
After the first tranche, the government will infuse Rs.10,000 crore each during 2017-18 and 2018-19.
During the last fiscal, 21 public sectors banks got fund support of Rs 25,000 crore. Of this, 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, Rs 2,009 crore in Indian Overseas Bank and Rs 1,732 crore in Punjab National Bank.