The government might inject more money in public sector banks given the non-performing asset issues, and increasing capital needs under Basel III guidelines. The exact sum will be decided after the first quarter results of banks, the report said, quoting a senior finance ministry official. “We will be taking into account the financial position of PSBs (public sector banks) after their first quarter results are available and then accordingly ask for more capital through a second supplementary," the report said quoting an official. A capital infusion worth 480 bln rupees will be required by banks in the current financial year (Apr-Mar), about five times the 100 bln rupees allocated by the government, according to a Reserve Bank of India estimate.
The sum allocated by the government for the current fiscal can be given only to 10-12 state-run banks, including IDBI Bank, the report said quoting the official. The RBI has presented two estimates for the capital requirement of public sector banks, the report said, quoting another finance ministry official aware of the deliberations. In one of its communications to the government, the central bank also presented a lower estimate of about 300 bln rupees.
Source : Newswire
