Govt may pump ₹8,000 crore more into public sector banks Won’t extend dates to deposit old notes: Govt
The government is looking to inject an additional ₹8,000 crore into the cashstarved public sector banks likely by the end of this financial year. This is in addition to the prescribed recapitalisation amount of ₹25,000 crore for the current financial year. 2017-18, finance minister Arun Jaitley has earmarked ₹10,000 crore.
The finance ministry and the Reserve Bank of India are holding discussions on the issue.
“A final decision on recapitalisation will be taken in 10 to 14 days,” a senior government official, who did not wish to be named, told Hindustan Times.
The government has already infused ₹ 22,915 crore into 13 public sector banks, which include the State Bank of India, Punjab National Bank and Indian Overseas Bank, this financial year. The finance ministry has been regularly reviewing the capital needs of these banks.
“The government is keeping a close watch on the performance, especially pertaining to recovery of bad loans of the banks that have been recapitalised..we will also assess the growth projections of various banks and then decide on further recapitalisation,” the official added.
The state owned banks require an amount of ₹1.8 lakh crore by 2018-19, of which the government has committed to provide ₹70,000 crore in the next four years. A few banks may also hit the market in the next financial year, depending on their performance. The gross non performing asset level—loans that have turned unproductive— increased to ₹6.3 lakh crore as on September end from ₹5.5 lakh crore at the end of the June quarter — an increase of ₹79,977 crore on a quarter on quarter basis.
In the economic survey, chief economic adviser Arvind Subramanian underlined the need for setting up a state-owned centralised public sector Asset Rehabilitation Agency or for bank to deal with the surge in NPAS.
₹12 LAKH CRORE INJECTED INTO THE SYSTEM: JAITLEY
Finance minister Arun Jaitley on Friday said that new currency notes of ₹12 lakh crore have been pumped into the system since November 9 after the announcement of the demonetization exercise.
According to the Reserve Bank of India data that was released on February 24, the currency in circulation was about ₹11,64,100 crore, the minister said. “This is the quantum of currency which they, as on February 24, made available in the market. A fortnight has almost elapsed since then..this amount itself would have now increased to beyond ₹12 lakh crore,” Jaitley said in Parliament during Question Hour. He, however, said that it was difficult to state an exact figure on how much has been deposited in defunct currency notes of ₹1000 and ₹500.
The Centre opposed on Friday petitions challenging its decision to go back on its promise of extending the date of depositing demonetised notes till March 31, saying as per the latest notification it’s a crime to be in possession of such currency.
Attorney General Mukul Rohatgi said the government would contest and there was no “question of giving in” and it was a crime to possess the old notes.
But, the court pointed to Rohatgi that there was a “window” provided for those who were unable to return the scrapped currency.
“What they (petitioners) are saying is that there was a window which was there in the first decision. He is saying the window was now closed in the ordinance,” the bench said.
“We want to make you alive to the situation,” the bench told Rohatgi who told the court he was ready to argue the matter and does not want time to file any official response.
The bench fixed March 21 to hear the petitions
Sudha Misra, who delivered two baby girls on November 4 last year – contended she could not deposit her old currency notes by December 31 because of her premature delivery.