Aiming at maintaining healthy books of public sector banks, Finance Minister Arun Jaitley on Wednesday charted out the government’s recapitalisation plans, underlining that all loans above Rs250 crore will undergo special monitoring.
The capital infusion plan for 2017-18 includes Rs80,000 crore through recap bonds and Rs 8,139 crore as budgetary support.
“We have announced Rs2.11 lakh crore recapitalisation of PSBs in October 2017. I have already moved a supplementary grant in Parliament on this. The entire objective of this exercise has been that it is government’s prime responsibility to keep PSBs in good health,” Jaitley told reporters at a press meet.
“We inherited a very major problem. The problem is of the past. Our objective was to find solution and create an institution so that the mistakes are not repeated,” he said.
According to the capital infusion plan for this fiscal, State Bank of India will get Rs 8,800 crore capital and Bank of India – Rs 9,232 crore. UCO Bank will get Rs 6,507 crore, Punjab National Bank – Rs 5,473 crore, Bank of Baroda – Rs 5,375 crore, Central Bank of India – Rs 5,158 crore, Canara Bank – Rs 4,865 crore, Indian Overseas Bank – Rs 4,694 crore, and Union Bank of India – Rs 4,524 crore.
Oriental Bank of Commerce would get Rs 3,571 crore, Dena Bank – Rs 3,045 crore, Bank of Maharashtra – Rs 3,173 crore, United Bank of India – Rs 2,634 crore, Corporation Bank – Rs 2,187 crore, Syndicate Bank – Rs 2,839 crore, Andhra Bank Rs 1,890 crore, Allahabad Bank – Rs 1,500 crore, and Punjab and Sind Bank – Rs 785 crore.
Jaitley said while planning recapitalisation the government had two objectives – which bank would get how much money and various steps to be taken to ensure that the PSBs follow higher standards.
There are 21 PSBs in the country that comprise 70 per cent of the banking industry, said Rajiv Kumar, Banking Secretary.
“As discussed earlier this recapitalisation will be front loaded depending on the performance and merit of the PSB,” said Kumar.
Allaying fears, he said: “Depositors’ money in PSB is safe.”
He also added PSBs should give loans responsibly so that there are no non-performing assets.