Preparations for the Union Budget 2020 are going fast. Finance Minister Nirmala Sitharaman is repeatedly meeting with various stakeholders and taking their suggestions. She can present her second budget on February 1. As of now, according to a report by news agency PTI, this time there is little hope that the government is announcing the infusion of capital in Public Sector Banks (PSBs). Instead, the government will encourage banks to speed up the process of recovery of stranded debt and raise funds from the market.
Disinvestment of non-core business
According to sources, the Narendra Modi-led government may also consider the option of disinvestment or sale of non-core businesses of public sector banks to raise funds during FY 2020-21. According to him, in this calendar year, banks have a concrete plan to recover from both NCLT and non-NCLT cases. Along with this, he is also thinking about raising money from the market.
Government share reduction process
With this, some banks have started preparing to reduce the government's stake. India's largest bank SBI has already begun the process of reducing its stake in its subsidiaries SBI Cards and Payment Services Ltd and UTI Mutual Fund. The bank is thinking of selling 50 lakh shares. This amounts to a 1.01% stake on the NSE.
Government has put in Rs 68,855 crore
Other public sector banks are also adopting a similar strategy to raise funds. Of the Rs 70,000 crore to be injected into banks in the current financial year, the government has already put Rs 68,855 crore. This may help in the implementation of the government's plan to merge several banks. The deadline to fulfill all regulatory requirements for the merger is March 31, 2019. Of the four anchor banks, Punjab National Bank has received Rs 16,091 crore, Canara Bank Rs 6,571 crore, Indian Bank Rs 2,534 crore and Union Bank of India Rs 11,768 crore.
Also Read:
MD Ashwin Lohani on news of Air India's closure says, "This rumor is baseless..."
Great cashback offers with low transaction charge with RuPay Card
This option is better in post office and bank to start RD
Big blow to common man's pocket, Petrol and diesel became expensive for fourth consecutive day
