Cabinet Approves Rs 2.11 lakh cr PSBs’ Capitalisation Plan

The Indian government has announced an allocation of Rs 2.11 lakh crore over 2 years for the recapitalization of public sector banks.

As part of the plan, the government will essentially issue bonds to banks worth Rs 1.35 lakh crore while Rs 76,000 crore will come through budgetary support. Lenders will subscribe to these bonds as part of their investment portfolio. The money raised by the government will then be used to recapitalize banks. 
Important Takeaways from Above News for IBPS PO Mains Exam-
  • For the current year, the government has set a fiscal deficit target of 3.2 percent of GDP.
  • Banks which had the lowest capital adequacy ratios at the end of the June included Central Bank of India (9.61 percent), UCO Bank (9.69 percent) and Corporation Bank (10.62 percent).
Source- Bloomberg


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