Govt may not infus e full Rs 20K cr in PSBs

‘The government had allocated Rs 20,000 crore in the Budget RE for recapitalisation

The government is unlikely to use up the entire 200 bln rupees allocated in the revised estimate for the current financial year ending March to recapitalise public sector banks, a senior finance ministry official said.

“Many PSU banks are tapping the market to raise capital by way of both equity and debt,” the official told Informist.

"Even the banks under the prompt corrective action framework have capital ratios above the regulatory requirement.”

The government had allocated 200 bln rupees in the revised estimate for 2020-21 to recapitalise state-owned banks by issuing bonds.

Of the total allocation, the government has so far infused only 55 bln rupees in public sector banks by issuing zero coupon bonds to Punjab & Sind Bank.

The official said that the government stands ready to infuse capital in public sector banks which are under the prompt corrective action framework, if needed, and is also evaluating capital needs of other banks.

Indian Overseas Bank, Central Bank of India and UCO Bank, which are under the prompt corrective action framework of the Reserve Bank of India, have Basel-III capital adequacy ratios of 11.49%, 12.39% and 12.08% respectively as on December 31.