Government to infuse Rs 18000 crore in public sector banks in first tranche

Banks will be getting their first tranche of the capital infusion, as the government has finalised about Rs 18,000 crore of fund infusion, which is almost 75% of the Rs 25,000 crore allocated in this year's budget for capital infusion. About 15 of the country's 27 public sector banks are expected to get capital in the first tranche and the second tranche of capital infusion will be done by the end of March 2017 after assessing the performance of lenders. The PSU banks cumulatively suffered losses of Rs 18,000 crore in the last fiscal, mainly on account of higher provisioning for bad loans so the government has finalised plan for the first round of capital infusion for state-run banks in the current financial year to bolster their capital.

Finance Minister Arun Jaitley during the budget had reiterated that the government will provide additional capital if required by banks and will find the resources for doing so. As per Finance ministry estimates public sector banks will require Rs 1.8 lakh crore of additional capital in the next four financial years, of which Rs 1.1 lakh crore will have to be raised from the market and through the sale of non-core assets.

In line with the blueprint, PSU banks will get Rs 25,000 crore this fiscal, besides, Rs 10,000 crore would be infused in 2017-18 and 2018-19 each. During the last fiscal, 21 public sectors banks got fund support of Rs 25,000 crore. Of this, SBI got the highest amount of Rs 5,393 crore followed by Bank of India at Rs 2,455 crore.