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CAG seeks details on banks' performance after recapitalisation: Report

In September, the Parliament approved capital infusion of Rs 20,000 crore into public sector banks (PSBs).

December 28, 2020 / 10:08 AM IST
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The Comptroller and Auditor General of India (CAG) has requested information on the performance of state-run banks after their recapitalisation (recap) over the past five years.

Ahead of the 2021-22 budget, the CAG has written to the Reserve Bank of India (RBI) seeking details on public sector banks (PSBs) recapitalisation, Business Standard reported.

"This (development) should be seen in the context of the opportunity cost of state-run banks' recap, given the limited fiscal space available," a source told the paper.

Also read: India needs multiple bad banks to clean balance sheets of lenders, get credit growth back: CII

"It's probably part of the steps towards sizing the true value of these banks ahead of privatisation and bringing uniformity in the standard of recap," the source added.

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Moneycontrol could not independently verify the story.

In September, the Parliament approved capital infusion of Rs 20,000 crore into public sector banks (PSBs). According to a PTI report, the Centre had spent Rs 80,000 crore in bank recapitalisation in FY18, Rs 1.08 lakh crore in FY19 and Rs 70,000 crore in FY20.

The RBI's Central Board met on December 18, where it reviewed the current economic situation in the backdrop of "global and domestic challenges and various areas of operations of the Reserve Bank".

The Central Board also discussed the draft Report on Trend and Progress of Banking in India, 2019-20.
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TAGS: #CAG #RBI
first published: Dec 28, 2020 10:08 am

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