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Govt to infuse Rs 42,000 cr in PSU banks by March; next tranche likely in December

The government will infuse Rs 42,000 crore in the state-owned banks by March-end and the next tranche would be released as early as next month, a senior finance ministry official said.

The government earlier this year pumped Rs 11,336 crore in five PSBs — Punjab National Bank (PNB), Allahabad Bank, Indian Overseas Bank, Andhra Bank, and Corporation Bank — to improve their financial health.

“We will infuse the next tranche of a recapitalisation by mid-December. Close to Rs 42,000 crore remain to be infused as capital in public sector banks in the current financial year,” the official said.

He said that large PSBs such as State Bank of India and PNB may not need more capital infusion in the current financial year ending March 2019.

“Some big state-owned banks like SBI and PNB may not need a further capital infusion from the government in 2018-19. PNB has already received regulatory capital twice so far,” the official said.

State-owned banks will need less capital to meet their capital adequacy norms, as the Reserve Bank of India last week decided to defer the deadline for them to meet the global norms or Basel-III requirement by a year till March 2020.

The RBI Board last week, while deciding to retain the capital adequacy requirement for banks at 9 percent, agreed to extend the transition period for implementing the last tranche of 0.625 percent under the capital conservation buffer (CCB) by one year — up to March 31, 2020.

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