FM aims Rs 15,600cr capital infusion for PSBs this fiscal

The finance ministry will soon announce capital infusion for PSU banks. The finance ministry has approved the bank re-capitalisation plan for this fiscal and will be infusing capital in close to 10 banks. The ministry wants the PSBs to meet Basel III norms by 2018 and hence it has outlined a capital infusion plan, reports CNBC-TV18’s Akansha Sethi.

State Bank of India is likely to get Rs 3,000 crore capital infusion and Punjab National Bank will get Rs 1,000 crore. Bank of India, United Bank, IDBI and Syndicate Bank are also in the line for capital infusion. Also Read: Govt can meet fiscal deficit target of 5.3%: Rangarajan
The government has budgeted Rs 15,600 crore this fiscal for capital infusion into public-sector banks. The capital in these banks is likely to be through the preferential allotment route.
The finance ministry in the Budget had also proposed of setting up a holding company for capital infusion in banks in the future, however there has been no movement on that as yet so that remains to be seen that how those Basel III norms will be met since the government is fiscally constrained.