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Govt to decide on infusion of additional capital into state-run banks: P Chidambaram

16 Nov 2012 Evaluate

Country’s state-run banks, amidst the rising non-performing assets (NPA) and write-offs, met Finance minster - P. Chidambaram to seek capital infusion from government. Chidambaram stated that government is planning for infusion of additional capital into state-run banks and the decision will be taken in couple of weeks.

However, the combined injection of capital will not exceed Rs 150 billion ($2.73 billion) provisioned in the budget for the fiscal year ending March 2013. The amount injected, even at the maximum, would fall short of the public banks’ capital requirements.  Indian Overseas Bank, Central Bank of India and Bank of Maharashtra are the top three banks that need the most capital.

By adding further, Chidambaram said that government will also take necessary steps to improve sectors such as textiles, steel, infrastructure, construction and telecom infrastructure that are the root cause of the bad loans at the state owned banks.

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