PCA banks with good performance will get funds: Jaitley

The Finance Minister said PSB banks that are under Prompt Corrective Action (PCA) but have improved their performance and the banks that are close to PCA deadline will get a capital infusion. 

Finance Minister, Arun Jaitley said that the government will provide capital infusion even for public-sector banks (PSB ) which will be merging. He added that the non-performing asset (NPA) recognition program is almost complete and NPAs are now down to 0.9 per cent. 

According to Union Banking Secretary, Rajiv Kumar, SBI, Bank of Baroda, Vijaya Bank and Indian Bank will not need funds, but Punjab National Bank will be given funds. 

The Central government is seeking parliament's sanction for Rs. 41,000 crore recapitalisation of PSU banks. This will take the recap amount to Rs. 1.06 lakh crore in FY19. Since his appointment, the RBI Governor Shaktikanta Das has been holding meetings with the chiefs of the state-run banks to discuss liquidity concerns, PCA norms and lending to MSMEs. Government is working out measures to stimulate lending by banks which will help boost the economy as well as bring in more business and help banks get out of PCA. 

Meanwhile, Nifty Bank closed at 27,275.10, down by 23.30 points or 0.09 per cent, dragged down by PSB stocks, while the Nifty PSU Bank index was down by 1.80 per cent. Among public-sector banks Central Bank, Bank of India, Vijaya Bank and Oriental Bank were trading in green.