The government is likely
to infuse Rs 28,615 crore into seven public sector banks (PSBs) through
recapitalisation bonds by the end of this month, sources said on Thursday.
The
amount infused will help the banks meet regulatory capital requirement, and its
disbursement might take place before December 31, sources said.
Out of these seven PSBs, Bank of India is likely to get the highest amount of Rs 10,086 crore, followed by Oriental Bank of Commerce, which might get Rs 5,500 crore through recapitalisation bonds, sources added
Other
banks that are likely to receive capital infusion in this round included Bank
of Maharashtra which may get Rs 4,498 crore, UCO Bank (Rs 3,056 crore) and
United Bank of India (Rs 2,159 crore).
The
government had earlier announced an infusion of Rs 65,000 crore in PSBs in
2018-19, of which Rs 23,000 crore has already been disbursed, while Rs 42,000
crore is remaining.
Earlier
this month, Finance Minister Arun Jaitley said the government would put an
additional Rs 41,000 crore in PSBs over and above what was announced earlier.
On
December 20, the government sought Parliament’s approval for infusion of an
additional Rs 41,000 crore. The
recapitalisation, the finance minister said, would enhance the lending capacity
of PSBs and help them come out of the Reserve Bank of India’s Prompt Corrective
Action (PCA) framework.
Eleven
out of the total 21 PSBs are under the RBI’s PCA framework, which imposes
lending restrictions on weak banks.
These
are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO
Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank
of Commerce, Dena Bank and Bank of Maharashtra.
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