Funds would be infused after Parliament approves third Supplementary Demand for Grants in the upcoming Budget session. Last year, the Government announced a revamp plan ‘Indradhanush’ to infuse Rs70,000 crore in state-owned banks over four years, while they will have to raise a further Rs 1.1 lakh crore from the markets to meet their capital requirements in line with global risk norms Basel III.
The government will infuse about Rs.5,000 crore capital in the public sector undertaking (PSU) banks in the current fiscal to strengthen their balancesheet. “As committed, banks will get fund infusion in the fourth quarter. Banks will get about Rs.5,000 crore,” financial services secretary Anjuly Chib Duggal said on the sidelines of an event.
As per the blueprint, PSU banks will get Rs.25,000 crore this fiscal and also in the next fiscal. Besides, Rs.10,000 crore each would be infused in 2017-18 and 2018-19. Of the Rs.25,000 crore earmarked for 2015-16, the government has pumped in about Rs.20,088 crore in 13 public sector banks so far. The government had arrived at Rs 1.8 lakh crore capitalization needs for PSU banks assuming credit growth rate of 12 per cent for the current year and 12-15 per cent for the next three years depending on the size of the bank and their growth ability. Talking about various initiatives taken by the government to deepen the social security net, Duggal said banks are addressing last mile connectivity issues. The department of financial services is having discussions with banks on a regular basis to sort out the issues as soon as possible, she said. Banks like State Bank of India and Andhra Bank are currently addressing issue of Internet connectivity in the 800 identified areas. Besides, steps are being taken to strengthen Internet connectivity in various parts so that direct benefit transfer is made seamless.