An urgent plan to infuse additional capital in PSU Banks is in the offing as per Government move.
- 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.
- 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.
- 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.
- The capital support is also likely to be increased to Rs. 80000- Rs. 100000 crore which would benefit many of the banks.
- 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.
- 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.
- Considering a credit growth of over 8% these plans have been worked out ofcourse it depends on fiscal maths also.