NEW DELHI: The government is unlikely to announce capital infusions for public sector banks (PSBs) in the next Budget because their financial health has improved due to a fall in bad loans, source said.
Banks would be encouraged to raise capital from the market as well as sell non-core assets to supplement their resources, they added. The government has set aside Rs 20,000 crore for PSB recapitalization in the current fiscal year.
On February 1, Finance Minister Nirmala Sitharaman is slated to release the Modi 2.0 government's fourth budget. It should be mentioned that PSBs' net profit increased to Rs 14,012 crore in the first quarter, and then to Rs 17,132 crore in the second quarter ended September 2021. The total profit earned in the first half of this fiscal year is close to the total profit earned in the previous fiscal year. PSBs raised capital money to the tune of Rs 58,697 crore in the previous fiscal year, the biggest sum ever raised in a fiscal.
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