IN FIRST TRANCHE OF FUND INFUSION

New Delhi, Dec. 17: Not all banks will be eligible for capital support of the government this fiscal, but those who have performed relatively better and need capital most will be considered for fund infusion, sources said.

It is not necessary that all banks will be issued recapitalisation bonds in the first tranche, but the money will be given depending on fulfilment of various parameters, including reforms undertaken, a senior official said.

Infusion would be contingent upon performance, reforms undertaken and future road map, the official said.

The quantum of the capital infusion during the current fiscal would be known after Parliament will give nod for this, the official said, adding that the government is yet to decide on SLR ( Statutory Liquidity Ratio) status for recapitalisation bonds.

The SLR status will ensure tradeability of bonds.

Finance Minister Arun Jaitley in October had announced an unprecedented ` 2.11 lakh crore two- year road map to strengthen PSBs, reeling under high NPAs or bad loans.

Their NPAs have increased to ` 7.33 lakh crore as of June 2017, from ` 2.75 lakh crore in March 2015.

The plan includes floating re- capitalisation bonds of ` 1.35 lakh crore and raising ` 58,000 crore from the market by diluting governments stake.