Recapitalization Bonds For PSU Banks In Four Months.

It is well known that the Finance Ministry has come out with a plan to recapitalize the Public Sector Banks, through induction of Rs. 70,000 which could bring the PSU banks out from the NPA issues.  The last month announcement by the Government was for an amount of Rs. 2.11 lakh crore, for strengthening of Public Sector Banks which included recapitalization of bonds of Rs. 1.35 lakh crore.  Now the Government is in the stage of finalization of bonds structures to be issued, which is expected to be announced by month end.  Further,

  • The Government feels there are multiple options available for recapitalization of bonds and are looking in to it
  • Though the preliminary assessment revealed that it would be somewhere around Rs. 70,000 crore and Rs. 80,000 crore, however still the same is not clear.
  • The NPAs of PSU Banks have gone up from 2.75lakh crore in March 2015 to 7.33 lakh crore as on June 2017 which is alarming.
  • In addition to the recapitalisation move, banks would get Rs. 18,000 crore under the Indradhanush plan during the next two years.  Under Indradhanush plan, 70,000 crore is expected to be infused in state run banks during a period of four years and further raise 1.1 lakh crore from the markets to meet the capital requirements to fuflfill the BASEL III norms.

During the period of last three and half years, the total Capital, pumped by the Government on the PSU banks is Rs. 52,000 crore and the remaining 18,000 crore would be pumped during two years period.

Author: Admin Bankedge

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