Govt to infuse Rs 28,615 cr in 7 PSBs soon

Government is planning to infuse Rs 28,615 crore into seven public sector banks (PSBs) via     recapitalisation bonds by the end of this month, sources said on Thursday.

This infusion will help the banks meet regulatory capital requirement, and its disbursement might take place before December 31, sources said.

Bank of India is likely to get the highest amount of Rs 10,086 crore, out of these seven PSBs, followed by Oriental Bank of Commerce, which might get Rs 5,500 crore through recapitalisation bonds, sources added.         

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) are the other banks that are likely to receive capital infusion in this round

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.

Finance Minister, Arun Jaitley, earlier this month had said that the government would put an additional Rs 41,000 crore in PSBs over and above what was announced earlier.

According to the finance minister recapitalisation would help them come out of the Reserve Bank of India’s Prompt Corrective Action (PCA) framework. Prompt Corrective Action (PCA) is a framework which imposes lending restrictions on weak banks. The recapitalisation would also enhance the lending capacity of PSBs

PSBs which are under the RBI’s PCA framework 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.