The capital infusion plan for 2017-18 includes Rs80,000 crore through recap bonds and Rs 8,139 crore as budgetary support.
PCA framework is one of RBI’s tool, which involves monitoring of certain performance indicators of the banks
Prime Minister Narendra Modi’s administration expects to sell the first of its recapitalization bonds before FY18 end
Already facing the heat due to ballooning NPAs, this development is most unwelcome.
Former RBI Governor D. Subbarao said it was not right to expect the Government to bail out banks at the expense of exchequer.
The government had on October 24 unveiled a Rs 2.11 lakh crore two-year roadmap for strengthening NPA-hit public sector banks
Banks received equity through preferential issue of shares with two of them informing stock exchanges about the decision.
Banks under PCA are also unlikely to get capital as the Reserve Bank of India (RBI) has already put many restrictions on their activities
The finance ministry said it has not provided the entire amount towards capital infusion in public sector banks
Without disclosing the quantum of Recap bonds that would form part of the Supplementary demand for grants