Three More State-Run Banks to Get Capital After Rs 11,336-Crore Infusion
The government may infuse capital in two to three more public-sector banks in a month, a senior official told BloombergQuint requesting anonymity a day after the government decided to fund five state-run lenders to the tune of Rs 11,336 crore.
The funding, which will take place via recapitalisation bonds, will be used by these banks to pay interest on bonds issued and meet regulatory requirements, the official said. The official didn’t specify the quantum of funds or the recipient-banks.
Growth capital will be given to those public-sector banks that meet the performance targets of the Ministry of Finance, the official quoted earlier said. They include improving operating performance, sale of non-core assets, closure of loss-making units and recovery of bad loans.
The five public sector banks that will receive Rs 11,336 crore to facilitate interest payments on bonds issued, as reported by BloombergQuint, are:
- Allahabad Bank.
- Punjab National Bank.
- Corporation Bank.
- Indian Overseas Bank.
- Andhra Bank.
The government had announced a Rs 2.11 lakh-crore capital infusion programme in October 2017, according to which Rs 1.35 lakh crore had to be infused using recapitalisation bonds. Nearly Rs 80,000 crore of the Rs 1.35 lakh crore was injected by issuing bonds.
The proposed infusion of Rs 11,336 crore takes the total infusion via the recapitalisation bond route to around Rs 91,336 crore.
Bloomberg separately reported Central Bank of India will receive nearly Rs 2,400 crore as part of the government’s fund infusion plans.