Infusion of Capital in PSU Banks

An urgent plan to infuse additional capital in PSU Banks is in the offing as per Government move.

1. This infusion would push credit flow and thus bring relief in bailing out the NNon-BankingFinance companies who are crippled with credit constraints which in turn has hit their growth.
2. The capitalization plan of Government is yet to infuse a balance of Rs. 42,000 crores into the PSU Banks which is likely to be complied with by now with this initiative from the Government side.
3. The cabinet would shortly take a decision on this and thus increase the lending power of PSU Banks and thus support the demands of the economy.
4. The capital support is also likely to be increased to Rs. 80000- Rs. 100000 crore which would benefit many of the banks.
5. As of November 9, the year on year credit growth was seen at 14.9% however, the sectors like Real Estate and MSME (Micro, Small and Medium Enterprises) have been denied funds.
6. These sectors were getting a majority of their credit requirements from the NBFCs whose funding to these sectors has been blocked due to the failure of Infrastructure, Leasing and Financial Services sector.
7. Considering a credit growth of over 8% these plans have been worked out ofcourse it depends on fiscal maths also.