Government Infused Rs 3.15 Lakh Crore In Public Sector Banks In Last 11 Years

The government has infused over Rs 3.15 lakh crore into public sector banks in the 11 years through 2018-19, the Parliament was informed Monday.

Replying to a question on PSU banks' capital requirements, Minister of State for Finance Anurag Singh Thakur said that according to Reserve Bank of India's guidelines, banks in India are required to maintain a minimum Capital to Risk-weighted Assets Ratio of 9 percent.

As on March 31, 2019, all 18 PSU banks meet this minimum CRAR requirement, the minister said in the written reply to the Lok Sabha.

Public sector banks source capital through internal capital generation, mobilisation of capital from markets, and infusion by the government. Thus, capital infusion by the government complements PSU banks' internal capital generation and mobilisation of capital from markets.

Between FY09 and FY19, PSU banks have mobilised Rs 2.81 lakh crore of capital through sources other than government, and have posted a net profit of Rs 98,373 crore, of which a sizeable proportion has contributed to internal capital generation, Thakur said in the Lok Sabha.

"During the same period, the government infused capital of Rs 3.15 lakh crore in public sector banks," the minister said.

In the budget for 2019-20, the government has outlined a Rs 70,000 crore PSU bank recapitalisation plan to boost credit for a "strong impetus" to the Indian economy.

According to inputs received from the State Bank of India, the PSU bank has obtained approval for raising equity capital of up to Rs 20,000 crore from the market by way of qualified institutional placement or other modes till March 2020.

SBI further said that it is well capitalised, with CRAR of 12.72 percent as on March 31, against the regulatory requirement of 11.325 percent. Depending upon requirements, it would decide on raising capital at an appropriate time during the financial year.