The government has provided over Rs 7,757-crore fresh equity to six
stressed state-run banks to help them meet the prescribed regulatory
capital requirement and state its commitment to keep banks well-funded.
Bank of India, IDBI Bank, Uco Bank, Bank of Maharashtra, Dena Bank
and Central Bank of India have received equity through preferential
issue of shares with two of them informing stock exchanges about the
decision.
When contacted, financial services secretary Rajiv Kumar confirmed
the development. “Banks will not suffer due to shortage of regulatory
capital. But we will monitor their functioning to ensure that they
undertake clean, responsible and prudent business to enhance stakeholder
value,” he told TOI.
The details of the monitoring plan are expected to be announced
shortly. While announcing a mega Rs 2.11-lakh-crore recapitalisation
plan, finance minister Arun Jaitley had said strict conditions will be
put in place to avoid a repeat of unbridled lending that has resulted in
record non-performing assets (NPAs) for Indian banks, especially those
in the public sector. At the same time, it is working on an
incentivising the better performers.
The six banks are on the list of players that are part of prompt
corrective action initiated against state-run lenders whose performance
has slipped due to a pile-up of bad debt. While the government decides the mode for recapitalisation of all
state-run banks, it advanced the release of funds to these six to help
them meet their equity requirements and enable them to resume normal
business.
Uco Bank informed the stock exchanges that on Thursday, the finance
ministry communicated its sanction for release of Rs 1,375 crore towards
preferential allotment of equity shares. Similarly, IDBI Bank has
received Rs 2,729 crore. In the Union Budget, the government had
budgeted for Rs 10,000 crore for recapitalisation of public sector banks
but, given the increase in NPAs, the allocation is set to be enhanced
in the next Budget.
Bank | Amount(Rs) |
IDBI Bank | 2729 Cr |
Bank of India | 2257 Cr |
Uco Bank | 1375 Cr |
Bank of Maharashtra | 650 Cr |
Central Bank of India | 323 Cr |
Dena Bank | 243 Cr |
Very good
ReplyDeleteGreat work done by govt. Govt should support psu banks to interest of public