In order to ease cash crunch, Finance Minister Arun Jaitley has said that the government will infuse Rs 83,000 crore in public sector banks (PSBs) in the remaining three months of the fiscal taking the total recapitalization of banks to Rs 1.06 lakh crore for the current financial year ending on March 31, 2019.
Jaitley said the move will increase the lending capacity of PSBs and help some of them to come out of Reserve Bank of India (RBI’s) Prompt Corrective Action (PCA) framework which imposes restrictions on their lending and bars them from opening more branches. He further said recognition of non-performing assets in the PSBs is complete, and the downslide in bad loans has begun.
Besides, the government sought Parliament's approval for infusion of an additional Rs 41,000 crore in the PSBs through the second batch of Supplementary Demands for Grants. This would enhance the total recapitalisation in the current fiscal from Rs 65,000 crore to Rs 1.06 lakh crore.
