Minister of State for Finance Jayant Sinha on Thursday said a comprehensive package will be announced for the recapitalisation of public-sector banks on Friday even as North Block gears up to seek parliament's nod for the first round of recapitalization.
In an interview to CNBC-TV18, VG Kannan, Managing Director, State Bank of India says he expects only capital announcements today.
Some of the measures he expects to be announced today are a delay in dividend repayment and listing of companies the PSU banks have lent to.
Below is the verbatim transcript of VG Kannan’s interview with Latha Vekatesh and Sonia Shenoy on CNBC-TV18.
Latha: Your bank doesn’t care much for the recapitalisation numbers, you have the strength perhaps to raise the money on your own but is there anything else that you are looking forward to or expecting from the government in terms of a package for PSU banks?
A: We just expect that when the government of India will announce an additional capitalisation to all the banks. As you know we have had a pretty stressful year last year 2014-2015 and going forward though the stress may not be the same as what we had last year but the credit growth having not going up, the income is not being commensurately high and there is a case for capitalisation. Many of the banks may not be in a position to go to market looking at their performances.
Latha: What is your own requirement and your expectation from the government for your bank?
A: Our expectation would be sky high. However, at the same time we have already had Rs 15,000 crore of enablement by the board to raise it. So, it is a question of timing when we will actually go to the market and pick it up. I don’t think so we will have much of difficulty in picking it up; the way we have been performing.
Latha: Your road shows are underway, should we expect to hear from you all shortly?
A: We have not yet started anything. It is a question of time and we will time it the way it happens because what happened is we also were looking for in the first few quarters but then the Grexit coming in so we have just put back by a few months or so. We should be hitting the market, but exact timing is not final as of now.
Sonia: Apart from recapitalisation any other measures that you would expect from the government today?
A: The government may also actually ask some of the companies where the banks has invested in to go in for a this thing. Many of the banks have got investments in companies like NSE and BSE, etc. So, these are all cases that if there is a possibility of nudging them to list and that could be an additional avenue for raising funds.
Latha: Nothing other than capital, I mean all this is only leading towards capital, nothing else you are expecting, a steel package or a something for NPLs?
A: I don’t think the government should interfere. If at all, it is the RBI which should intervene.
Latha: RBI is the owner so they have a better right than the regulator to start giving you a steel package.
A: If they give us any package then that should not be something which is outside the assets classification, etc.
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