Dec 31: The government, by way of a recapitalization exercise, is set to pump in Rs 28,615 crore into seven public sector banks (PSBs). With the amount, the banks will be able to meet the regulatory capital requirement, and its distribution is likely to be done before December 31.
According to news reports, among the seven PSBs, Bank of India is expected to get the highest amount which will be Rs 10,086 crore. Oriental Bank of Commerce is likely to get the second highest amount – Rs 5,500 crore. Bank of Maharashtra, UCO Bank and United Bank of India which are also likely to get the capital infusion might get Rs 4,498 crore, Rs 3,056 crore and Rs 2,159 crore respectively.
Earlier the government had announced an infusion of Rs 65,000 crore in PSBs in 2018-19. From this, an amount of Rs 23,000 crore is already distributed and Rs 42,000 crore is yet to be distributed. Finance Minister Arun Jaitley had recently said that apart from the amount announced earlier, the government will put an extra amount of Rs 41,000 crore.
The government had asked for the consent of Parliament for the infusion of an extra amount of Rs 41,000 crore on December 20. Talking about the recapitalization, the finance minister said that it will improve the lending capacity of PSBs and support them in leaving the Prompt Corrective Action (PCA) framework by the Reserve Bank of India. Out of the total 21 PSBs, 11 are under the PCA framework of RBI. The framework enforces limitations of lending on weaker banks.
The 11 banks which come under the PCA framework are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.