The Finance Ministry is considering infusing more than the announced Rs 70,000 crore in public sector banks to help strengthen their balance sheets, inform officials.
“We are assessing the capital requirement position of each bank depending on their bad loans and, if need be, we may have to expand the capital infusion programme,” said a ministry official.
An announcement to this effect could be made next month by Finance Minister Arun Jaitley in the Budget 2016-17 if the government decides to expand the capital infusion programme, sources said, adding that the plan is at a preliminary stage and no decision has been taken so far.
As per the capital infusion road map, PSU banks will get Rs 25,000 crore this fiscal and as well as the next fiscal and Rs 10,000 crore each in 2017-18 and 2018-19.
Out of Rs 25,000 crore set for the current fiscal, the government has infused about Rs 20,088 crore in 13 public sector banks.
The rest of the amount is expected to be infused this quarter after the passage of third supplementary demands for grants likely next month.
The fund infusion this quarter will be based on banks registering improvement in terms NPA, stressed asset and in terms of their restructuring.
RBI has taken a very strong position on stressed asset, saying lenders must come out with a programme of liquidating some of the debt.
Last month, Reserve Bank of India Governor Raghuram Rajan had said steps taken by the central bank and the government should help lenders clean up their balance sheets by March 201