Govt to infuse Rs 48,239 cr in 12 public sector banks

New Delhi, February 20

The Finance Ministry today announced to pump in Rs 48,239 crore in 12 public sector banks (PSBs) in this fiscal to help them maintain regulatory capital requirements and finance growth plans.

With this funding, the total amount of capital infusion would increase to Rs 1,00,958 crore of the planned recapitalisation of Rs 1.06 lakh crore for PSBs for the current fiscal, according to Financial Services Secretary Rajiv Kumar.

The remaining Rs 5,000-crore capital infusion would be used as buffer for any contingency or growth capital for Bank of Baroda which is in the process of merging Dena Bank and Vijaya Bank with itself.

“It (pending Rs 5,000 crore) may be used for any contingency or for growth capital wherever it is necessary, including amalgamated entity of Bank of Baroda,” Kumar said.

Corporation Bank is the biggest beneficiary of this round of capital infusion with Rs 9,086 crore of funding, followed by Allahabad Bank with Rs 6,896 crore. Explaining the rationale for giving higher capital to these two banks, Kumar said equipping these two better performing banks, currently under the Prompt Corrective Action (PCA) supervision of the RBI, would help meet requisite capital thresholds of 7.375 CET-1 ratio, 8.875% Tier I ratio, 10.875% of capital-to-risk weighted assets ratio (CRAR) and the net NPA ratio threshold of below 6%.

Further, Rs 4,638 crore and Rs 205 crore will be provided to Bank of India and Bank of Maharashtra. These banks have recently come out of the regulatory supervisory framework PCA of the RBI.

Kumar further said Punjab National Bank will get Rs 5,908 crore, Union Bank of India Rs 4,112 crore, Andhra Bank Rs 3,256 crore and Syndicate Bank Rs 1,603 crore.

The government will pump in Rs 12,535 crore in four other banks under PCA — Central Bank of India, United Bank, UCO Bank and Indian Overseas Bank. — PTI

Corporation Bank biggest beneficiary 

• With this funding, the total amount of capital infusion would increase to Rs 1,00,958 crore of the planned recapitalisation of Rs1.06 lakh crore for PSBs for the current fiscal

• The remaining Rs 5,000 crore capital infusion would be used as buffer for any contingency or growth capital for Bank of Baroda which is in the process of merging Dena Bank and Vijaya Bank with itself

• Corporation Bank is the biggest beneficiary of this round of capital infusion with Rs 9,086 crore of funding, followed by Allahabad Bank with Rs 6,896 crore