The Narendra Modi government has allocated Rs 22,915 crore to meet the
capitalization needs of Public Sector Banks (PSBs) in the current fiscal.
The Narendra
Modi government has allocated Rs 22,915 crore to meet the
capitalization needs of Public Sector Banks (PSBs) in the current fiscal. This
is in line with its Indradhanush initiative, aimed at restoring banking sector
health.
The maximum capital infusion will be for State Bank of India (SBI) at Rs
7,575 crore and the least for Allahabad Bank at Rs 44 crore. A total of 13 PSBs
will be part of this capital infusion drive.According to a Ministry of Finance release, the capital infusion is based on “needs as assessed from the CAGR of credit growth for the last five years, banks’ own projections of credit growth and an objective assessment of the potential for growth of each PSB.”
Allocation break-up as released by Ministry of Finance
“75% of the amount collected for each bank is being released now to provide liquidity support for lending operations as also to enable banks to raise funds from the market,” said the Ministry release.
The balance amount will be released later. “This is linked to performance, with particular reference to greater efficiency, growth of both credit and deposits and reduction in the cost of operations,” the release added.
