Finance Ministry To Take Call On Capital Infusion Into Banks In Q4

New Delhi: The Finance Ministry will take a decision in the fourth quarter of the financial year to infuse the remaining Rs 14,500 crore capital in public sector banks (PSBs). Sources have given information in this regard. Giving information, sources said that after reviewing the performance of the first half, it has been revealed that Punjab and Sindh Bank, out of the 12 public sector banks, require capital of Rs 5,500 crore to meet the regulatory requirements. In such a situation, the government has approved to deposit capital in Punjab and Sindh Bank with the preferential allocation of equity shares last month.

The Parliament has approved Rs 20,000 crore for public sector banks in September under the first batch of supplementary demands for grants for the FY 2020-21. Of this, Rs 14,500 crore is left after depositing Rs 5,500 crore in Punjab and Sindh Bank. Sources said that a review of the performance after the third quarter data would give banks a clear idea of how much extra burden has been put on them by the one-time restructuring of loans as per RBI guidelines amid the Corona epidemic.

Sources said that apart from that, things would have been cleared regarding non-performing assets (NPA) at that time because by then the Supreme Court will probably give a verdict on the interesting case on interest. In the last financial year 2019-20, the government proposed to deposit capital of Rs 70,000 crore in public sector banks. However, the Government did not make any such commitment in the 2020–21 budget, as it believed that banks would collect money from the market according to their requirement.

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