25 Jan 2018 13:23 IST

Centre to infuse over ₹88,000 cr in PSU banks this fiscal

Banks would have to first accept and adopt the reforms package finalised by the Finance Ministry

The Centre on Wednesday announced that it would infuse over ₹88,000 crore as capital in public sector banks this fiscal, including ₹80,000 crore through recapitalisation bonds and ₹8,139 crore as budgetary support.

“This plan addresses the regulatory capital requirement of all PSBs and provides a significant amount towards growth capital for increasing lending to the economy,” said Finance Minister Arun Jaitley.

Financial Services Secretary Rajeev Kumar said that banks would have to first accept and adopt the reforms package finalised by the Finance Ministry, which is aimed at six themes of customer responsiveness, responsible banking, credit offtake, PSBs as Udyami Mitra, deepening financial inclusion & digitalisation and developing personnel for brand PSB.

According to the capital infusion plan for this fiscal, State Bank of India will get ₹8,800 crore capital and Bank of India - ₹9,232 crore. UCO Bank will get ₹6,507 crore, Punjab National Bank - ₹5,473 crore, Bank of Baroda - ₹5,375 crore, Central Bank of India - ₹5,158 crore, Canara Bank - ₹4,865 crore, Indian Overseas Bank - ₹4,694 crore, and Union Bank of India - ₹4,524 crore.

Oriental Bank of Commerce would get ₹3,571 crore, Dena Bank - ₹3,045 crore, Bank of Maharashtra - ₹3,173 crore, United Bank of India - ₹2,634 crore, Corporation Bank - ₹2,187 crore, Syndicate Bank - ₹2,839 crore, Andhra Bank ₹1,890 crore, Allahabad Bank - ₹1,500 crore, and Punjab and Sind Bank - ₹785 crore.

The recapitalisation bonds will be non SLR status and non-tradeable. They will be issued in six tranches with a tenure of 10-15 years, said Economic Affairs Secretary Subhash Chandra Garg, adding that they will be a cash neutral arrangement and so will not impact the Centre’s fiscal deficit.