The government will provide capital support to the tune of Rs 6,000 crore to public sector banks during the next fiscal to strengthen their capital base and to maintain a minimum Tier I Capital to Risk Weighted Asset Ratio (CRAR) at 8 per cent. During the year 2010-11, the government is providing a sum of Rs 20,157 crore for infusion in public sector banks to maintain Tier I CRAR at 8 per cent and increase the government equity in some banks to 58 per cent.
As part of recapitalization exercise, the government approved infusion of Rs 6,211 crore into five banks in June 2010. Banks, which had got capital support from the government in the first tranche, included Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.
The second tranche, announced earlier this month, also provided capital support for several public sector banks, including Corporation Bank , UCO Bank, Indian Overseas Bank and United Bank of India .
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